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

question 30

Multiple Choice

Under the direct write-off method of accounting for uncollectible accounts, Bad Debt Expense is debited

• A)when a credit sale is past due.
• B)at the end of each accounting period.
• C)whenever a pre-determined amount of credit sales have been made.
• D)when an account is determined to be uncollectible.

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Definitions:

Cooperative

An organization consisting of people who pool their resources to buy and sell more efficiently than they could individually.

Single-Owner

Pertains to a business that is exclusively owned by one individual who is responsible for its operations and liabilities.

Business Organization

An entity formed for the purpose of carrying out commercial enterprise, including options such as sole proprietorships, partnerships, and corporations.

Partnership

A legal form of business operation where two or more individuals share ownership, as well as the responsibility for managing the business and the sharing of its profits and losses.