Owens Company Uses the Direct Write-Off Method of Accounting for Uncollectible

question 64

Essay

Owens Company uses the direct write-off method of accounting for uncollectible accounts receivable. On December 6, Year 1, Owens sold $6,300 of merchandise to the Valley Company. On August 8, Year 2, after numerous attempts to collect the account, Owens determined that the account of the Valley Company was uncollectible.
a. Prepare the journal entry required to record the transactions on August 8.
b. Assuming that the $6,300 is material, explain how the direct write-off method violates the expense recognition (matching) principle in this case.

Understand the impact of technological advancements on the supply of goods.

Analyze the effects of input costs on the supply of goods.

Interpret market dynamics of surplus and shortage through supply and demand analysis.

Appreciate the role of expectations regarding future prices in supply decisions.

---

Definitions:

Functionality

Refers to the range of operations that can be performed by a product or a system.

Components Connected

Describes parts or elements that are linked or joined together within a system or structure.

Reliability

The degree to which a system or component consistently performs its intended function under specified conditions over time.

Simulation Models

Computer-based models that represent real-world processes or systems for the purpose of analysis or decision-making.