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What method is allowed under U.S. GAAP to estimate uncollectible accounts receivable?

Under U.S. GAAP, only the allowance method is an allowable method to estimate uncollectible accounts receivable. The allowance method recognizes bad debt expense when the company believes there is a high likelihood the receivable will not be collected, which follows the matching principle. The direct write-off method violates the matching principle.


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