Mr Smith if you continue to allow wholesale customers

Mr. Smith if you continue to allow wholesale customers to buy plumbing supplies on account, you will face a continuance problem in the end. Customers not paying their accounts on time or not pay at all will hurt your business in the long run. You can offer discounts to the customers that pay on their accounts early or pay them off in full. You have a choice of what type of method you want for writing off uncollectible accounts. The first method is, Allowance which is reporting accounts receivable in the financial statements at net realizable value (Edmonds, olds & McNair, 2012). The second method is, percent of receivables which is an alternative to the percent of revenue method, which focuses on estimating the expense of uncollectible accounts, you can estimate the amount of adjusting to record uncollectible accounts (Edmonds, olds & McNair, 2012). Mr. Smith another idea would be to set up individual accounts with receivable ledgers for each customer.

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