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    1. What accounting rule is violated by the direct charge-off method of recognizing noncollectable accounts? Why?

    2. In what ways is Allowance for Noncollectable Accounts similar to Accumulated Depreciation? In what ways is it different?

    3. Under what circumstances would an accrual of interest income on an interest-bearing note receivable not be required at the end of an accounting period?

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    Solution Preview

    1. The accounting rule of matching concept is violated. Matching concept states that expenses should be matched to the revenues. This implies that all expenses ...

    Solution Summary

    The solution explains some accounting questions relating to allowance for doubtful debts and accrual of interest income