Under the direct write-off method of accounting for uncollectible accounts
A) the allowance account is increased for the actual amount of bad debt at the time of write-off.
B) a specific account receivable is decreased for the actual amount of bad debt at the time of write-off.
C) balance sheet relationships are emphasized.
D) bad debt expense is always recorded in the period in which the revenue was recorded.

Question

Quizplus · Accepted Answer

Under the direct write-off method, a specific account receivable is decreased for the actual amount of bad debt at the time of write-off. This method does not use an allowance account and does not emphasize balance sheet relationships. Bad debt expense is recorded when the specific account is written off.

Under the Direct Write-Off Method of Accounting for Uncollectible Accounts