The direct write-off method of accounting for uncollectible accounts
A)emphasizes the matching of expenses with revenues.
B)emphasizes balance sheet relationships.
C)emphasizes cash realizable value.
D)is not generally accepted as a basis for estimating bad debts.

Question

Quizplus · Accepted Answer

The direct write-off method does not conform to the matching principle, which is why it is not generally accepted for estimating bad debts. It records bad debt expense only when an account is determined to be uncollectible, which can occur in a different period than the related revenue.

The Direct Write-Off Method of Accounting for Uncollectible Accounts