Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 27 - No. 49)
Which of the following is an advantage of using the allowance method over the direct write-off method for accounting for bad debts?
It is simpler to apply.
It adheres more closely to the matching principle.
It results in a lower taxable income.
It eliminates the need for estimates.
Explanation
The allowance method uses estimates for bad debt expense.
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