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How is the allowance method of accounting for bad debts different from the direct write off...

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Accounting

How is the allowance method of accounting for bad debtsdifferent from the direct write off method? Which is the preferredmethod? Why? In what ways are accounts receivable similar to a notereceivable? How are they different? Why might a company choose toissue a note receivable over an account receivable?

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In allowance method record a possible allowance at the time which credit sales made But in direct write off method record the entry only when the bad debt arises In allowance method they are credit sales are matched with allowances during same year In direct write of method both credit sales and adjustment of bad debt will    See Answer
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