The two methods of accounting for uncollectible receivables are the allowance method and the
A) equity method
B) direct write-off method
C) interest method
D) cost method

Question

Quizplus · Accepted Answer

The direct write-off method is not generally accepted by GAAP, as it violates the matching principle. The equity, interest, and cost methods are not applicable to accounting for uncollectible receivables. Therefore, the best choice is B - the direct write-off method.

The Two Methods of Accounting for Uncollectible Receivables Are the Allowance