The direct write-off method frequently results in the bad debt expense being recognized in the year subsequent to the sale,and thus results in a proper matching of expense with revenue.

Question

Quizplus · Accepted Answer

The direct write-off method does not result in a proper matching of expense with revenue because bad debt expense is recognized only when a specific account is deemed uncollectible. This could happen months or even years after the sale was made, which does not match the expense with the corresponding revenue. Therefore, the statement is false.

The Direct Write-Off Method Frequently Results in the Bad Debt