Question: 1. When using the allowance method, what account is debited when writing off uncollectible accounts? How does this differ from the direct write-off method?
2. When a receivable is written off under the allowance method, how does it affect the net realizable value shown on the balance sheet?
3. How does the percent-of-sales method compute bad debts expense?
4. How do the percent-of-receivables and aging-of-receivables methods compute bad debts expense?