If bad debt losses are significant, the direct write-off method is acceptable for financial reporting purposes.

Name: If bad debt losses are significant, the direct write-off method is acceptable for financial reporting purposes.
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Quizplus · Accepted Answer

The direct write-off method is not acceptable for financial reporting purposes if bad debt losses are significant, as it does not comply with the matching principle required by Generally Accepted Accounting Principles (GAAP).

If Bad Debt Losses Are Significant, the Direct Write-Off Method