11. Under the direct write-off method, no attempt is made to match bad debts expense to sales revenues in the same accounting period.
12. Allowance for Doubtful Accounts is debited under the direct write-off method when an account is determined to be uncollectible.
13. Allowance for Doubtful Accounts is a contra asset account.
14. Cash realizable value is determined by subtracting Allowance for Doubtful Accounts from Net Sales.
15. IFRS require that the direct write-off method be used for financial reporting purposes if it is also used for tax purposes.
16.Under the allowance method, Bad Debt Expense is debited when an account is deemed uncollectible and must be written off.
17. Under the allowance method, the cash realizable value of receivables is the same both before and after an account has been written off.
18. The percentage of sales basis for estimating uncollectible accounts always results in more Bad Debt Expense being recognized than the percentage of receivables basis.
19. An aging schedule is prepared only for old accounts receivables that have been past due for more than one year.
20. An aging of accounts receivable schedule is based on the premise that the longer the period an account remains unpaid, the greater the probability that it will eventually be collected.