Which of the following is not a disadvantage of using the direct write-off method for recording uncollectible accounts?

Question

Quizplus · Accepted Answer

This statement is true, as the direct write-off method does report actual losses. However, choices B, C, and D are all disadvantages of using the direct write-off method. Choice B refers to the fact that the direct write-off method does not match expenses with revenues in the appropriate period, as it delays recognition of uncollectible accounts until they are actually written off. Choice C refers to the possibility that management could manipulate income by delaying write-offs of uncollectible accounts until a later period to boost current year earnings. Choice D refers to the fact that accounts receivable are overstated on the balance sheet until the uncollectible accounts are written off, which could mislead investors and creditors about the true value of the accounts receivable.

Which of the Following Is Not a Disadvantage of Using