Question: 1. How do sellers benefit from allowing their customers to use credit cards?
2. Why does the direct write-off method of accounting for bad debts usually fail to match revenues and expenses?
3. Explain why writing off a bad debt against the Allowance for Doubtful Accounts does not reduce the estimated realizable value of a company's accounts receivable.
4. Why does the Bad Debts Expense account usually not have the same adjusted balance as the Allowance for Doubtful Accounts?
5. Why might a business prefer a note receivable to an account receivable(AR)?