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U5 Review Assignment

U5 Review Assignment

1. Briefly describe the two methods for recording and writing-off bad debts.

2. What accounts are debited and which are credited when recording a bad debt using the direct write off method?

3. What accounts are debited and which are credited when recording bad debts expense using the allowance method?

4. Describe the three options for estimating bad debt under the allowance method.

5. What does the Accounts Receivable Turnover ratio tell us, and how is it calculated?

6. How do you compute interest for a partial year?