A company that uses the direct write-off method must still prepare a year-end adjustment to estimate its uncollectible accounts.

Name: A company that uses the direct write-off method must still prepare a year-end adjustment to estimate its uncollectible accounts.
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Question

Quizplus · Accepted Answer

The direct write-off method does not involve estimating uncollectible accounts, so no year-end adjustment is needed. Instead, bad debts are only recorded when a specific account is deemed to be uncollectible.

A Company That Uses the Direct Write-Off Method Must Still