When a Company Determines a Particular Account to Be Uncollectible

question 140

Multiple Choice

When a company determines a particular account to be uncollectible, it charges the loss to Bad Debt Expense under

• A) the allowance method.
• B) the direct writeoff method.
• C) both the allowance method and the direct write-off method.
• D) None of these answer choices are correct.

---

Definitions:

Due Diligence

An investigative process performed by investors or companies to assess the viability, risks, and opportunities of a prospective deal, investment, or partnership.

Venture Capitalist

An investor who provides capital to startups or small businesses with high growth potential in exchange for equity or partial ownership.

Promising Venture

An enterprise or venture that shows a lot of potential for success and growth due to its innovative approach or market position.

Prototype

An early sample, model, or release of a product built to test a concept or process or to act as a thing to be replicated or learned from.