The Direct Write Off Method of Accounting for the Impairment

question 33

Multiple Choice

The direct write off method of accounting for the impairment of receivables

• A) is never acceptable.
• B) is an acceptable method when the effect of not applying the allowance method would be highly immaterial.
• C) is specifically disallowed under IFRS.
• D) usually results in the same net income as the allowance method.

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Definitions:

Forecast Equation

A Forecast Equation is an algorithm or model used in statistics and econometrics to predict future values based on past and present information.

Regression Model

A statistical model that examines the relationship between a dependent variable and one or more independent variables.

Indicator Variables

Variables used in statistical models to represent categorical data by assigning a numerical value, typically 0 or 1, to each category.

Regression Equation

An equation that describes the relationship between a dependent variable and one or more independent variables.