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When making adjusting entries for bad debt expense, it's common practice to estimate this portion of credit sales. The adjusting entry is made to the
When making adjusting entries for bad debt expense, it's common practice to estimate this portion of credit sales. The adjusting entry is made to the Allowance for Doubtful Accounts. As you've learned, the company doesn't really know the true amount of bad debt expense. Since accuracy and reliability are of utmost importance in accounting reporting, what would be a better way to handle and report bad debt expense? Think about a reasonable solution to this situation.
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