Accounting How To: Help for Accounting Students, Bookkeepers, and Business Owners

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, bad...

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...

When an asset is put in service in any month other than January (or first month of a fiscal year), a business generally takes depreciation only for the months the asset was owned. To calculate the...

Whether a company records its depreciation monthly or yearly, an adjusting journal entry is made to adjust the balance of depreciation expense and to record the the loss of value of the asset in the...