Recording Bad Debt Expense During the Period When an Account

question 125

Multiple Choice

Recording bad debt expense during the period when an account is determined to be uncollectible, which is generally not allowed under U.S. GAAP, is known as the ________.

• A) allowance method
• B) non-allowance method
• C) direct write-off method
• D) net write-off method

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Definitions:

Indoor Management Rule

A legal principle that protects third parties who enter into contracts with a company, assuming the company's internal rules and procedures have been followed.

Shareholders' Resolution

A formal decision or expression of opinion passed by the shareholders of a company, often related to its management or policies.

Coffee Import Business

The business activity of bringing coffee from foreign countries into one's own country for sale and distribution.

Indoor Management Rule

A legal principle allowing outsiders dealing with a company to assume that internal company rules have been properly followed.