The direct write-off method is more conservative than the allowance method for valuation of receivables.

Name: The direct write-off method is more conservative than the allowance method for valuation of receivables.
Brand: Quizplus
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Quizplus · Accepted Answer

Actually, the allowance method is more conservative because it anticipates possible losses and sets aside a reserve for uncollectible accounts, while the direct write-off method only recognizes bad debt expense when a specific account is deemed uncollectible.

The Direct Write-Off Method Is More Conservative Than the Allowance