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Explain the typical way companies account for uncollectible accounts receivable (bad debts).
1) When is it permissible to record bad debt expense only at the time when receivables prove
uncollectible?
2) Working capital assets are comprised of cash, accounts receivables, and inventory. Is one
more important to manage than another? Why? Why not? Which of these are the most difficult to
manage?

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Explain the typical way companies account for uncollectible accounts.pdf

  • 1. Explain the typical way companies account for uncollectible accounts receivable (bad debts). 1) When is it permissible to record bad debt expense only at the time when receivables prove uncollectible? 2) Working capital assets are comprised of cash, accounts receivables, and inventory. Is one more important to manage than another? Why? Why not? Which of these are the most difficult to manage?