Even schools with the most stringent of tuition policies can find themselves dealing with delinquent accounts. So, how do you account for them?
How to Write-off the Balance?
The accounting profession prefers the allowance method over the direct write-off method because it more accurately matches revenue with expenses. The accounts receivable will be presented on the balance sheet with a reduction called the allowance for doubtful accounts. This means the net amount of the accounts receivable will be lower and closer to the amount that will actually be collected. Bad debt expense is reported at the time the allowance for doubtful …read more
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