Write in 400-600 words.
• What are the 2 methods that companies implement to adjust the outstanding accounts receivable for the current accounting period? How often is this done?
• Please provide an example of each in detail.
• Explain how these methods can impact the financials as a whole, and specifically how they can be misread by an overstatement of accounts receivable dependent upon the users of the information.
• Include in your explanation which method you feel would be best a small equipment rental company, and support your reasoning.