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One of the Methods for Recognizing Uncollectible Accounts Is the Direct

Question 54

Matching

One of the methods for recognizing uncollectible accounts is the direct write-off method.Indicate whether each of the following statements is true or false.

Premises:
The direct write-off method is easier to use than the allowance method.
The direct write-off method is allowed for some companies because of the going concern concept.
The direct write-off method requires an advance estimate of anticipated uncollectible accounts.
The direct write-off method is not permitted by GAAP if uncollectible accounts expense is immaterial.
The direct write-off method does not require the use of an allowance account.
Responses:
False
True

Correct Answer:

The direct write-off method is easier to use than the allowance method.
The direct write-off method is allowed for some companies because of the going concern concept.
The direct write-off method requires an advance estimate of anticipated uncollectible accounts.
The direct write-off method is not permitted by GAAP if uncollectible accounts expense is immaterial.
The direct write-off method does not require the use of an allowance account.
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