Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 10 - No. 31)
Why might a company choose to use the allowance method instead of the direct write-off method for bad debts?
The allowance method is simpler.
The allowance method better matches expenses with revenues.
The allowance method is required by GAAP.
The direct write-off method leads to a higher tax liability.
Explanation
The allowance method better matches expenses with revenues.
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