Click here to take part in the discussion
- Watch A. Mursau’s video titled “Accounts Receivable Bad Debt Expense (Direct Write Off Method Vs Allowance Method)”:
- Based on the information in the video, discuss the primary advantages and disadvantages of applying the direct write-off over the allowance method of writing off accounts. Take a position on whether or not estimating the allowance for doubtful accounts provides the opportunity to distort gross income.
- Provide support for your rationale.
- Use the Internet to research an annual report of a retail company.
- Then, imagine you are an investor or creditor; suggest the ratios that you believe would provide an investor or creditor with the most important information needed to make accurate predictions about the company’s financial condition. When analyzing a company, is it more important to compare the ratios to competitors or to the company’s previous history?
- Provide a rationale for your response.
Students using the online discussion thread must provide a link or instructions to the researched report.