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

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Definitions:

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