Please discuss the questions:

1. Dan's Hardware is a small hardware store in the rural township of Twin Bridges. It rarely extends credit to its customers in the form of an account receivable. The few customers who are allowed to carry account receivabole are long-time residents of Twin Bridges whith a history of doing business at Dan's Hardware. What method of accounting for uncollectible receivable should Dan's Hardware use? Why?

2. A firm has consistently adjusted its allownance account at the end of the fiscal year by adding a fixed percent of the period's sales on account. After seven years , the balance in Allowance for Doubtful Accounts has become very large in relationship to the balance in Account Receivable. Give two possible explanations.