The direct write-off method is generally not permitted for financial reporting purposes because:   Multiple Choice   Compared to the allowance method, it would allow greater flexibility to managers in manipulating reported net income.   Accounts receivable are not reported for the net amount expected to be collected.   This method is primarily used for tax purposes.   It is too difficult to accurately estimate future bad debts.

Which of the following statements is not correct?(1) Bank charges are not zero-rated item.(2) Input VAT is claimable on bank charges.(3) Bank charges are not exempt supply.(4) Input VAT is not claimable on bank charges.(5) Finance costs are exempt supply.

eceivables arise due to a deferred sale, and companies are often unable to collect all their debts, which means that part of those debts may become non-existent or there is doubt about the possibility of collection. 1- What is the difference between bad debts and doubtful debts?   2- Draft an example (supported by numbers) to explain the method of doubtful debts in dealing with bad debts, provided that the explanation includes accounting restrictions and the impact on the financial statements?   3- Explain why the use of the direct method (bad debt method) conflicts with generally accepted accounting principles?   4- One of the methods for estimating doubtful debts is the deferred sales method, the receivables balance method, and the receivables aging method. Required: Formulate an example (enhanced by numbers) to explain the method of aging receivables in estimating doubtful debts, taking into account the following: (1) the number of clients should be 10 clients, (2) the percentages…