One of the Weaknesses of the Direct Write-Off Method Is

question 177

Multiple Choice

One of the weaknesses of the direct write-off method is that it

• A) understates accounts receivable on the balance sheet
• B) violates the matching principle
• C) is too difficult to use for many companies
• D) is based on estimates

---

Definitions:

Coefficient of Determination

A statistic that indicates the proportion of the variance in the dependent variable predictable from the independent variable(s).

Correlation

A quantitative measure that indicates the extent to which two or more variables fluctuate together.

Correlation Coefficient

A numerical measure that quantifies the degree to which two variables are related, ranging from -1 (perfect negative correlation) to +1 (perfect positive correlation).

One-tailed Hypothesis

A hypothesis test that considers either a decrease or an increase in a specific direction, focusing on one end of the probability distribution.