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4 . How do companies account for bad debts? Discuss the two primary methods: the direct write - off method and the allowance method. Explain
How do companies account for bad debts? Discuss the two primary methods: the direct writeoff method and the allowance method. Explain the advantages and disadvantages of each method, and describe how the choice between these methods can affect a companys financial statements. Provide an example of journal entries for each method.
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