Which of the following is a CORRECT statement regarding the direct write-off method for uncollectible accounts?
A)Most companies use the direct-write off method for their financial statements.
B)Companies are required to use the direct write-off method for federal income tax purposes.
C)A company records the Uncollectible-Account Expense when it writes off an individual account receivable.
D)B and C.

Question

Quizplus · Accepted Answer

B) The IRS requires some businesses to use the direct write-off method for tax purposes, allowing them to deduct bad debts only when they are written off, not when they are estimated. C) In the direct write-off method, the expense is recorded at the time a specific account is deemed uncollectible and is written off, directly impacting the accounts receivable and the expense account.

Which of the Following Is a CORRECT Statement Regarding the Direct