ALLOWANCE METHOD Definition

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ALLOWANCE METHOD is the accepted way to account for bad debt. Bad debt expense may be based on the percent of credit sales for the period, an aging of the accounts receivable balance at the end of the period, or some other method, e.g., percent of accounts receivable.

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UN-CREDITED CHECK is a check that has been presented to the bank but still are under process by the bank. The customer account has been debited already.

MEMORANDUM FOR RECORD (MR) is an in-house memo covering information that would otherwise not be recorded in writing.

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