The Direct Write-Off Method Is Acceptable for Financial Reporting Purposes

question 80

Multiple Choice

The direct write-off method is acceptable for financial reporting purposes only if the bad debt losses are insignificant.

• A)This is a false statement because the direct write-off method violates the matching principle.
• B)This is a true statement based on the concept of materiality.
• C)This is a false statement because the direct write-off method can only be used for tax reporting.
• D)This is a true statement because companies can choose either the direct write-off or the allowance method for financial reporting, as long as they consistently apply the method.

Recognize the importance of inflation and taxation on savings and retirement planning.

Analyze retirement savings strategies, including asset allocation in tax-sheltered accounts.

Understand the mechanics and benefits of saving for higher education and retirement through specific tax-advantaged accounts.

Understand the correlation between leader task-oriented behavior and subordinate satisfaction.

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Externality

An outcome from economic behavior that impacts individuals not directly involved, which may be beneficial or harmful.