ACCT 284 at Iowa State University

4. Income Statement vs Balance Sheet Methods

in Topic 7 (Video 4 of 6)
Under tha Allowance Method of accounting for bad debts, we have two ways of coming up with our estimates: The Income Statement method and the Balance Sheet method. In this video, I'll show you how to remember which is which.

This Video Mentioned Some Formulas

Ending Allowance for Bad Debts = Ending A/R * Estimated %
(Balance Sheet Method)
Bad Debt Expense = Net Credit Sales * Estimated %
(Income Statement Method)

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