Accounting How To: How to Pass Accounting Class!

Under the Percent of Sales Method for tracking bad debts, credit sales (not cash sales) are multiplied by a percent to arrive at the estimate for bad debts. That percentage will be based on the...

Under the Aging of Accounts Receivable Method for accounting for bad debts, a company creates an estimate of bad debts based on the age of outstanding invoices. This estimate is based on a company's...

The Allowance Method for Doubtful or Uncollectible Accounts is used to estimate future bad debts based on current month revenues. Using past performance data, a company can estimate that a certain...

The direct write-off method for bad debts is a method used by smaller companies with few receivables. Debts are written-off at the time the debt is determined to be uncollectible. When is the...

The main difference between the Direct Write-off Method and the Allowance Method in accounting for bad debt is the timing of when bad debt expense is recorded. Under the Direct Write-off Method,...

When an asset is sold or scrapped, a journal entry is made to remove the asset and its related accumulated depreciation from the book. The asset is credited, accumulated depreciation is debited, cash...