Risk-return tradeoff definition — AccountingTools
Some investors develop a portfolio of low-risk, low-return investments and higher-risk, higher-return investments in hopes of achieving a more balanced risk-return trade-off. A canny investor delves into the fundamentals of a prospective investment to gain insights into the actual amount of risk associated with it.
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How to write off a bad debt — AccountingTools
February 04, 2022. / Steven Bragg. A bad debt can be written off using either the direct write off method or the provision method. The first approach tends to delay recognition of the bad debt expense. It is necessary to write off a bad debt when the related customer invoice is considered to be uncollectible. Otherwise, a business will carry an
How to write off a fixed asset — AccountingTools
A fixed asset write off transaction should only be recorded after written authorization concerning the targeted asset has been secured. This approval should come from the manager responsible for the asset, and sometimes also the chief financial officer. Fixed asset write offs should be recorded as soon after the disposal of an asset as possible.
Direct write-off method vs allowance method
The Difference Between the Direct Write-Off and Allowance Methods. Under the direct write-off method, a bad debt is charged to expense as soon as it is apparent that an invoice will not be paid. Under the allowance method, an estimate of the future amount of bad debt is charged to a reserve account as soon as a sale is made.