A company is not able to reasonably estimate its bad debts expense. The method it may use is:
A) net realizable value method.
B) direct write-off method.
C) aging method.
D) income statement method.

Question

Quizplus · Accepted Answer

The direct write-off method is used when a company cannot reasonably estimate its bad debts expense. This method involves waiting until an account is deemed uncollectible before writing it off, bypassing the estimation of bad debts.

A Company Is Not Able to Reasonably Estimate Its Bad