GAAP requires the use of an allowance for doubtful accounts to provide an estimate of...
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Accounting
GAAP requires the use of an allowance for doubtful accounts to provide an estimate of net realizable value. However, the allowance can never be more than an estimate and therefore, is subject to manipulation. The IRS knows this and will not allow the allowance. For tax purposes, companies must use only the direct write off method. Which method do you believe gives the more useful information to the user of the financial statements? This needs to be 250 words in length.
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