The direct write-off method is in accordance with the accrual method of accounting,whereas the allowance method is not.

Question

Quizplus · Accepted Answer

The statement is incorrect. The allowance method is in accordance with the accrual method of accounting, whereas the direct write-off method is not. The allowance method recognizes the estimated losses from uncollectible accounts as an expense in the same period in which the related sales occur, while the direct write-off method only recognizes the expense when the specific account is deemed uncollectible and written off.

The Direct Write-Off Method Is in Accordance with the Accrual