Allowance for Doubtful Accounts Is Decreased Under the Direct Write-Off

question 108

True/False

Allowance for Doubtful Accounts is decreased under the direct write-off method when an account is determined to be uncollectible.

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Definitions:

Contractual Liability

The obligations and responsibilities one party owes to another under the terms of a contract.

Unidentified Principal

An unidentified principal occurs in agency relationships when the third party interacting with the agent does not know the identity of the principal for whom the agent is acting.

Disclosed Principal

A principal whose identity is made known by the agent to the third party at the time of entering into a contract with the third party.

Undisclosed Principal

A party in a contract whose identity is unknown to the third party with whom the agent interacts, during the transaction.