The materiality principle allows companies with low amounts of uncollectible accounts to use the direct write-off method.

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The materiality principle states that a company should account for and disclose only significant items, while ignoring immaterial items. Therefore, if a company has low amounts of uncollectible accounts, it may be considered immaterial and can use the direct write-off method.

The Materiality Principle Allows Companies with Low Amounts of Uncollectible