The direct write-off method for uncollectible accounts receivable:
A)reports receivables at their net realizable value.
B)does not use an Allowance for Uncollectible Accounts.
C)is considered to follow Generally Accepted Accounting Principles.
D)estimates uncollectible accounts as a percentage of sales.

Question

Quizplus · Accepted Answer

The direct write-off method does not use an Allowance for Uncollectible Accounts and simply writes off uncollectible accounts when they are deemed to be uncollectible. This method is not considered to follow Generally Accepted Accounting Principles because it does not match expenses with revenues. It also does not estimate uncollectible accounts as a percentage of sales. Therefore, option B is the correct choice.

The Direct Write-Off Method for Uncollectible Accounts Receivable