To Write Off an Uncollectible Account Using the Direct Write-Off

question 118

Multiple Choice

To write off an uncollectible account using the direct write-off method:

• A)include a credit to Accounts Receivable.
• B)include a credit to Allowance for Uncollectible Accounts.
• C)include a credit to Uncollectible-Account Expense.
• D)no entry is required.

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Definitions:

Practical Capacity

The maximum amount of work or output that can be realistically achieved in a specific period under normal operating conditions.

Cost Allocation

The process of assigning indirect costs to different departments, products, or projects based on relevant distribution bases.

Cost Pool

A grouping of individual costs, typically by department or service center, from which cost allocations are made.

Cost Objects

Any item for which costs are separately measured and tracked, including products, services, projects, or activities.