The Use of the Allowance Method of Accounting for Bad

question 62

Multiple Choice

The use of the allowance method of accounting for bad debts is preferred over the direct write-off method because of the:

• A)matching principle.
• B)historical cost principle.
• C)revenue recognition principle.
• D)full disclosure principle.

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Definitions:

Visibility

The degree to which activities, work, or processes are observable, transparent, or apparent to others.

Non-substitutability

The characteristic of being unique or irreplaceable, usually in the context of resources, skills, or roles within an organizational setting.

Critical Part

A component or element that is considered essential for the successful operation or completion of a system, process, or project.

Contingencies of Power

Factors that affect the ability of one party to influence another, including conditions of dependency, substitutability, and centrality.