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Post Info TOPIC: Difference between bad debt and allowance


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Difference between bad debt and allowance


Hi,

I'm asking about the difference between the direct write-off of a bad debt vs. the allowance method.

I know that under a bad debt expense, a specific invoice is being charged off against it, while under the allowance method only an estimate is being charged off.

I had two questions:

1. Besides the fact that the amount netted against receivables may vary accordingly, there is no other difference regarding effect on AR, correct?

Many Thanks



-- Edited by mindy on Thursday 16th of December 2021 12:45:32 PM

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Mindy

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