Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited
A) when a credit sale is past due.
B) at the end of each accounting period.
C) whenever a pre-determined amount of credit sales have been made.
D) when an account is determined to be uncollectible.

Question

Quizplus · Accepted Answer

Under the direct write-off method, Bad Debts Expense is debited only when a specific account is determined to be uncollectible, after attempts to collect have been exhausted. This method is generally not used for financial reporting purposes as it does not match expenses with revenues in the same accounting period.

Under the Direct Write-Off Method of Accounting for Uncollectible Accounts