The Direct Write-Off Method Provides a Good Match Between the Revenue

question 138

True/False

The direct write-off method provides a good match between the revenue (sale)and the bad debts expense,because the write-off is matched directly with the sale.

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Definitions:

Fraud Detector

A system or process designed to identify fraudulent activities or transactions.

Ultramares Rule

The Ultramares rule is a legal doctrine relating to negligence, limiting the liability of auditors to third parties for financial report errors, except in cases of fraud or gross negligence.

Accountant Liability

Refers to the legal obligation of accountants to perform their duties in accordance with laws and professional standards, under which failure can result in legal or professional penalties.

Privity Rule

A legal principle stating that contracts cannot confer rights or impose obligations upon any person who is not a party to the contract.