Watch A. Mursau’s video titled “Accounts Receivable Bad Debt Expense (Direct Write Off Method Vs Allowance Method)”:
Click here to open the video in a new window.
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 distorts gross income.
Provide support for your rationale.