Discuss the allowance method of accounting for losses


Response to the following questions:

1. Why do most companies tolerate having a small percentage of uncollectible accounts receivable?

2. Why does the accounting profession require the use of the allowance method of accounting for losses due to bad debts rather than the direct writeoff method?

If possible, please give examples to better understand your answers.

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Accounting Basics: Discuss the allowance method of accounting for losses
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