Which of the following statements is not correct?
A) Under the direct write-off method,no provision is created when the risk of uncollectibility appears.
B) All countries allow the direct write-off method.
C) The direct write-off method shows receivables at their nominal value when in fact,there is a known risk of uncollectibility.
D) The only situation where the direct write-off method might not create a misrepresentation of the financial situation of the firm is when the sales revenue and the percentage of uncollectible receivables is essentially constant or stable.

Question

Quizplus · Accepted Answer

It is not true that all countries allow the direct write-off method. Many countries, including the United States, have alternative methods for recognizing bad debts such as the allowance method.

Which of the Following Statements Is Not Correct