If the Direct Write-Off Method of Accounting for Uncollectible Receivables

question 73

Multiple Choice

If the direct write-off method of accounting for uncollectible receivables is used,what general ledger account is debited to write off a customer's account as uncollectible?

• A)Bad Debts Recovered
• B)Bad Debts Expense
• C)Accounts Receivable
• D)Interest Expense

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Definitions:

Structured Investment Vehicles

Finance entities created to manage a portfolio of investment assets, often using leverage to finance long-term assets with short-term debt.

SIVs

Structured Investment Vehicles, which are pool investment entities created to finance long-term assets with short-term debt, known for their role in the financial crisis due to liquidity issues.

Credit Default Swap

A financial derivative that allows an investor to "swap" or offset their credit risk with that of another investor.