The direct write-off method of accounting for uncollectible accounts overstates assets on the balance sheet.

Name: The direct write-off method of accounting for uncollectible accounts overstates assets on the balance sheet.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The direct write-off method does not reflect the true value of Accounts Receivable on the balance sheet, as the uncollectible accounts are not taken into consideration until they are actually written off. This results in an overstatement of assets.

The Direct Write-Off Method of Accounting for Uncollectible Accounts Overstates