Truth in Reporting --Dickeson

When is a Sale a Sale?

Next, we "accrue" sales. That is we call a transaction a "sale" before we collect the cash for the sale and call it a receivable. Then we make an assumption that "X" proportion of those receivables will not be collectible. That's then an expense we call a "reserve." Next, we may write some of the accounts "off" and charge that reserve. I'm not kidding!