The Direct Write-Off Method for Uncollectible Accounts

question 151

Multiple Choice

The direct write-off method for uncollectible accounts:

• A)violates the expense recognition principle.
• B)is an acceptable alternative method of recognizing Bad Debt Expense under GAAP.
• C)results in higher Bad Debt Expense for most companies.
• D)may only be used by companies that do not extend credit to their customers.

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Definitions:

Tenacity

A personality trait characterized by persistence and determination in pursuing goals despite obstacles or difficulties.

Exploration

“Mapping out” a new area of research before proceeding to study it more specifically. This sort of research may lead down unknown paths as opposed to testing a specific hypothesis.

Exploration

The process of searching or traveling with the aim of discovery.

One-tailed Hypothesis

A statistical test hypothesis that specifies the direction of the expected difference or relationship.