The Direct Write-Off Method for Uncollectible Accounts Is Not Allowed

question 66

True/False

The direct write-off method for uncollectible accounts is not allowed by GAAP because it understates the net realizable value of accounts receivable and violates the expense recognition principle.

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Definitions:

Isolated Battery

An isolated battery refers to a battery that is physically and electrically separated from other components in a system, typically to prevent electrical interference, ground loops, or to provide a backup power source.

Integral Hydrometer

An integral hydrometer is a device that is built into another system to measure the specific gravity or density of liquids, often used in battery maintenance.

Colored Dot

A marking typically used to signify a specific characteristic or alignment requirement in various contexts, such as tire balancing or part selection.

Sight Glass

A transparent tube or window on equipment or containers, used for observing the level or flow of liquids and gases within.