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We learned in Bad Debt 1 HW that accrual-basis taxpayers cannot use the allowance method to estimate bad debt. The IRS allows a special method
We learned in Bad Debt 1 HW that accrual-basis taxpayers cannot use the allowance method to estimate bad debt. The IRS allows a special method that does not officially use the allowance method, but the effect is the same as if they used the allowance method. Hint: review the expanded solutions for chapter 3.
1. What is the name of this method?
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2. What kind of businesses may or may not use this method?
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3. In what way is this method similar to the allowance method and in what way is it technically different?
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