Allowance for Doubtful Accounts and Bad Debts Expense Part 2 (Financial Accounting Tutorial #42)
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- Опубликовано: 29 авг 2024
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I summarize the reason as to why we use the allowance method in this video as well as outline the accounts we'll use to adjust our overstated receivables and net income. This video will begin to talk about Bad Debts Expense (affecting the net income statement) and Allowance For Doubtful Accounts (affecting the balance sheet) which will match our expenses and comply with the matching principle but ALSO give us the net realizable value for our receivables.
These two accounts are used whenever we want to make an estimation regarding bad debts or uncollectible accounts.
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Much more effective explanation than how my textbook wanted me to learn this, hanks.
Thanks for watching Nick!
better than my teacher
Seriously makes taking online courses more understandable.
What is the difference between Allowance for doubtful account and allowance for uncolectnle account?
Hey, great explanation. But, there is one thing that really annoyed me regarding to Allowance method. If in direct write off method we recover the bad debt expense account in income statement as revenue/uncollectible recovery or what ever the account is, why wouldn't we do the same thing in the allowance method.
Every book always explained that we need two entries to recover bad debt which had been written off(when the customer paid the doubtful account which had been written off): 1) Receivables(Dr),Allowance(Cr) , and 2)Cash(Dr),Receivables(Cr).
in my logic, if the Receivables already paid, it means the allowance should be removed too, but these two entries ignore the fact that we already recorded the bad debt expense in the first place. In my opinion, we need one more entry : Allowance(Dr),Retained Earning(Cr) or Bad debt recovery(Cr-Income statement). Because the doubtful account wasn't there anymore when the receivables already paid and we need to recover the retained earning because the expenses didn't really happen.
What do you thing about my case? Please help me to solve this case. Thanks.
You're extremely helpful! THANK YOU!
Wow. Wonderful tutorial! Very informative.
You sir, are awesome. You make it so easy to understand these concepts
***** Thank you
Should Allowance for doubtful accounts Be same as Bad debt expense?
If yes or no, why?
Thank u , u made me understand AFDD
I had a guy in this kik group take literally over 2 hours to explain this to me and still didn't get it, I watch this 6 minute video and immediately get it lol
thank you!
Love dat Canadian accent!!
Subscribing !
this is horrible use better examples dude, your getting me confused