A Company Has Significant Uncollectable Receivables

question 132

Multiple Choice

A company has significant uncollectable receivables. Why is the direct write- off method unacceptable?

• A)It is not allowed for tax reasons.
• B)Assets will be understated on the balance sheet.
• C)Direct write- offs would be immaterial.
• D)It violates the matching principle.

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Definitions:

APA Code

The Ethical Principles of Psychologists and Code of Conduct established by the American Psychological Association, guiding professional behavior.

Ethics

The branch of philosophy that involves systematizing, defending, and recommending concepts of right and wrong behavior.

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A research method that involves collecting data from a predefined group of respondents to gain information and insights on various topics.