Which of the following are the two methods of accounting for uncollectible receivables?
A)direct write-off method and liability method
B)asset method and sales method
C)allowance method and liability method
D)allowance method and direct write-off method

Question

Quizplus · Accepted Answer

The two methods of accounting for uncollectible receivables are the allowance method and direct write-off method. The direct write-off method involves writing off the uncollectible amount when it becomes evident, while the allowance method involves estimating and recording a reserve for uncollectible accounts based on historical data and current economic conditions. Choice A is incorrect because the liability method is not a method of accounting for uncollectible receivables. Choice B is incorrect because there is no asset method or sales method for accounting for uncollectible receivables. Choice C is incorrect because the liability method is not a method of accounting for uncollectible receivables.

Which of the Following Are the Two Methods of Accounting