A Company Uses the Direct Write-Off Method of Accounting for Bad

question 21

Multiple Choice

A company uses the direct write-off method of accounting for bad debts.Which of the following does this entail?

• A) establishing an estimate for the allowance for doubtful accounts
• B) recording bad debt expense only when an account is determined to be uncollected
• C) reducing the accounts receivable account at the end of the accounting period for estimated uncollected accounts
• D) keeping total assets the same when an account is written off