1. Two methods of accounting for uncollectible accounts are the a. direct write-off method and the allowance method b. allowance method and the accrual method c. allowance method and the net realizable method d. direct write-off method and the accrual method

Two methods of accounting for uncollectible accounts are the direct write-off method and the allowance method.

Explanation:

Direct written-off method:

Here, the charging of bad debts in expense only when individual invoices are identified as uncollectible.

Allowance method:

Here, an estimate of future value of bad debt is charged in reserve account after a sale is completed.

Difference between direct write-off method and the allowance method:

Accuracy: The accurate amount of the bad debt expense is noted under direct write-off method as specific invoice is being noted, while only approximate value is charged off under allowance method.

Timing: The bad debt expense identification is delayed under direct write-off method, while it is quick under the allowance method.

Receivable line item: It is low under allowance method, since reserve is being evaluated against receivable amount.