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Question 2 ABC Company is selling goods to their customers for both cash and...

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Accounting

Question 2

ABC Company is selling goods to their customers for both cash and credit. The company expected that part of credit sales to be uncollectible and accounting their uncollectible receivables by using direct write-off method and allowance method.

Required

1. Discuss the accounting for uncollectable receivables by using direct write-off method and allowance method.

2. Identify which one of the above method of accounting for uncollectible receivables is preferable and discuss why?

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