The Materiality Constraint,as Applied to Bad Debts

question 46

Multiple Choice

The materiality constraint,as applied to bad debts:

• A)Permits the use of the direct write-off method when bad debts expenses are relatively small.
• B)Requires use of the allowance method for bad debts.
• C)Requires use of the direct write-off method.
• D)Requires that bad debts not be written off.
• E)Requires that expenses be reported in the same period as the sales they helped produce.

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Definitions:

Negative Impact

An adverse effect or harm that arises from a particular process or action.

Traffic Congestion

A condition on transport networks that occurs as use increases, characterized by slower speeds, longer trip times, and increased vehicular queueing.

Early-bird Parking

Discounted or reserved parking spaces offered to individuals who arrive at a location or event early.

Toll Road

a public or private roadway for which a fee is assessed for passage.