When Is It Acceptable to Use the Direct Write-Off Method

question 18

Multiple Choice

When is it acceptable to use the direct write-off method to account for uncollectible accounts?

• A) When the expected bad debts are significant
• B) When the company pledges its accounts receivables
• C) When the expected bad debts are not significant
• D) It is never acceptable to use the direct write-off method under GAAP
• E) When the company sells its accounts receivables

---

Definitions:

Accommodation

The process of adjusting one's cognitive structures to integrate new information.

Assimilation

The cognitive process by which a person integrates new ideas, experiences, or information into existing cognitive structures.

Schema

Cognitive structures or frameworks that help organize and interpret information, forming the basis of knowledge and understanding.

Preoperational

A stage in Piaget's theory of cognitive development, during which a child from about 2 to 7 years old begins to engage in symbolic play but does not yet understand concrete logic.