The direct write-off method would be considered acceptable if bad debts were very low.

Name: The direct write-off method would be considered acceptable if bad debts were very low.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The direct write-off method is acceptable only when the bad debts are not significant. If bad debts are high, it is not a reliable method as it does not match expenses with revenues in the same period. In such cases, the allowance method is preferred.

The Direct Write-Off Method Would Be Considered Acceptable If Bad