I always have a difficult time writing a response to so many Accounting Discussion questions. Could help me with writing a response to this post:

1. Estimating bad debt when doing statements like it is manipulating net income, but it is a procedure when doing statements. When doing so companies can see where they're on receivables have gone wary and where cash could have been allocated differently.

2. Using the direct write off method to account for bad debts that will not get paid, no matter how many tries to receive payment. Also, the allowance method can be used to control the estimates by showing the estimated amount of uncollectible receivables at the end of the accounting period.

3. One could refer to the notes receivable as well as past dealings with said companies.