When Is It Acceptable to Use the Direct Write-Off Method

question 32

Multiple Choice

When is it acceptable to use the direct write-off method?

• A)If the dollar amount of uncollectible accounts is not material.
• B)If most uncollectible accounts do not occur in the period of sale.
• C)If most sales are made to other businesses.
• D)All of these answer choices are correct.

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Definitions:

Full Employment

An economic situation where all available labor resources are being used in the most efficient way possible, essentially meaning there is no involuntary unemployment.

Keynes

Refers to John Maynard Keynes, an influential British economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments.

Government Spending

Expenditures by the government for goods and services that directly benefit the population, including spending on health, education, defense, and public infrastructure.

Keynes

Refers to John Maynard Keynes, a British economist whose theories on government spending and monetary policy formed the basis of Keynesian economics.