If bad debts are NOT significant which method is best to use?
A) direct write off method
B) percentage of credit sales method
C) allowance method
D) aging of accounts receivable method

Question

Quizplus · Accepted Answer

If bad debts are not significant, the direct write off method is the simplest and most straightforward method to use. It involves directly writing off the uncollectible accounts as they become evident. This method is not acceptable under the GAAP as it does not match expenses to revenues, but for small businesses, it may be the most practical approach.

If Bad Debts Are NOT Significant Which Method Is Best