A Company That Uses the Direct Write-Off Method of Accounting

question 7

True/False

A company that uses the direct write-off method of accounting for uncollectible accounts must still prepare a year-end adjusting entry to estimate its uncollectibles.

---

Definitions:

Probability

A measure of the likelihood of occurrence of an event, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Z Statistic

A statistic that tells us how many standard deviations an element is from the mean. It is used in hypothesis testing.

Probability

A measure quantifying the likelihood that events will occur, ranging from 0 (impossibility) to 1 (certainty).

α

Typically used to denote the level of significance in hypothesis testing, representing the probability of rejecting a true null hypothesis or the threshold of rareness.