The direct write-off method for uncollectible accounts:
A)violates the expense recognition principle.
B)is an acceptable alternative method of recognizing Bad Debt Expense under GAAP.
C)results in higher Bad Debt Expense for most companies.
D)may only be used by companies that do not extend credit to their customers.

Question

Quizplus · Accepted Answer

GAAP does not allow the use of the direct write-off method because it violates the expense recognition principle.

The Direct Write-Off Method for Uncollectible Accounts