The direct write-off method for uncollectible accounts is not allowed by GAAP because it overstates the net realizable value of accounts receivable and violates the expense recognition principle.

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The direct write-off method is not allowed by GAAP because it does not match expenses with revenues and overstates the value of accounts receivable. The allowance method is the preferred method for recognizing and accounting for uncollectible accounts.

The Direct Write-Off Method for Uncollectible Accounts Is Not Allowed