Which of the Following Is an Advantage of Using the Direct

question 11

Multiple Choice

Which of the following is an advantage of using the direct write-off method?

• A) The revenue associated with the sale might be recognized in one period and the expense resulting from the uncollectible account recognized in another.
• B) The amount of Bad Debt Expense recognized in a given period is subject to manipulation by management.
• C) The amount of Accounts Receivable reported on the balance sheet does not represent the amount of cash actually expected to be collected.
• D) It is very simple to apply.

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Definitions:

Alimony

Payments made to a spouse or ex-spouse under a divorce or separation agreement, which may be tax-deductible for the payer and taxable income for the recipient.

Distance Test

Specifically related to moving expense deductions, it's the requirement that a new job location must be a certain minimum distance further from the taxpayer's old home than the old job location was.

Moving Expense Deductions

Tax deductions that were available for taxpayers to deduct certain expenses related to moving for a job, although largely suspended since 2018 for non-military taxpayers.

HSA

Health Savings Account; a savings account that allows individuals to set aside money pre-tax for medical expenses.