One of the Weaknesses of the Direct Write-Off Method Is

question 177

Multiple Choice

One of the weaknesses of the direct write-off method is that it

• A) understates accounts receivable on the balance sheet
• B) violates the matching principle
• C) is too difficult to use for many companies
• D) is based on estimates

---

Definitions:

Disclose Only

A policy or requirement of revealing information without necessitating additional actions or changes based on the disclosure.

Note Issuance

The process of creating and distributing promissory notes, which are written promises to pay a specified sum of money at a future date.

Note Maturity

Note maturity is the date on which the principal amount of a promissory note, bond, or other debt instrument becomes due and payable.

Discount Rate

The interest rate used to discount future cash flows to their present value, often reflecting the cost of capital or investment risk.