The direct write-off method of accounting for uncollectible accounts
A) emphasizes balance sheet relationships
B) is often used by small companies and companies with few receivables
C) emphasizes cash realizable value
D) emphasizes the matching of expenses with revenues

Question

Quizplus · Accepted Answer

The direct write-off method is often used by small companies and companies with few receivables because it is simple and easy to use. It does not emphasize balance sheet relationships or cash realizable value, and it does not match expenses with revenues. It simply writes off the uncollectible account as a bad debt expense when it becomes apparent that the account will not be collected.

The Direct Write-Off Method of Accounting for Uncollectible Accounts