Under the Direct Write-Off Method of Accounting for Uncollectible Accounts

question 151

Multiple Choice

Under the direct write-off method of accounting for uncollectible accounts

• A) the allowance account is increased for the actual amount of bad debt at the time of write-off.
• B) a specific account receivable is decreased for the actual amount of bad debt at the time of write-off.
• C) balance sheet relationships are emphasized.
• D) bad debts expense is always recorded in the period in which the revenue was recorded.

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Definitions:

Specific Gravity

A dimensionless number that describes the ratio of the density of a substance to the density of a reference substance, typically water at 4 °C.

Acid

A chemical substance that donates protons or accepts electrons and has a sour taste.

Water

A ubiquitous chemical substance with the formula H2O, essential for all known forms of life and used as a solvent among its numerous roles.

Electrode

A conductor through which electricity enters or leaves an object, substance, or region, commonly used in batteries and electrolysis.