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The direct write - off method of accounting for bad debts: Often fails to match bad debt losses with sales for the same period Is
The direct writeoff method of accounting for bad debts:
Often fails to match bad debt losses with sales for the same period
Is subject to a significant amount of estimation error
Requires that losses from bad debts be recorded in the period in which sales are made
Causes accounts receivable to appear on the balance sheet at their estimated net realizable value
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