A non-GAAP alternative to the allowance method of accounting for uncollectible accounts refers to the
A)direct write-off method.
B)allowance method.
C)percentage of sales method.
D)aging of accounts method.

Question

Quizplus · Accepted Answer

The direct write-off method does not use an allowance for uncollectible accounts and instead records a bad debt expense only when a specific account is deemed uncollectible. This is a non-GAAP alternative to the allowance method, which is required under GAAP accounting standards. The percentage of sales method and aging of accounts method are both variations on the allowance method and are also required under GAAP.

A Non-GAAP Alternative to the Allowance Method of Accounting for Uncollectible