1 Explain the matching principle in relation to recording Bad Debts Expense.

2 What is the purpose of the Allowance for Doubtful Accounts?

3 What is net realizable value?

4 When an account receivable is written off, Bad Debts Expense must be debited. True or false? Please discuss.

5 Explain why the Allowance for Doubtful Accounts is a contra-asset account.

6 Recording Bad Debts Expense is a closing entry. True or false? Defend your position.

7 The income statement approach used to estimate bad debts is based on Accounts Receivable on the balance sheet. Agree or disagree? Why?

8 In which approach is the balance of the Allowance for Doubtful Accounts considered when the estimate of Bad Debts Expense is made? Please explain.

9 Why would a company age its Accounts Receivable?

10 Using the Allowance for Doubtful Accounts method, what journal entries would be made to write off an account as well as later record the recovery of the accounts receivable?

11 Why doesnt net realizable value change when an account is written off in the use of the Allowance account?

12 What is the purpose of using a direct write-off method?