Which of the Following Is a CORRECT Statement Regarding the Direct

question 36

Multiple Choice

Which of the following is a CORRECT statement regarding the direct write-off method for uncollectible accounts?

• A)Most companies use the direct-write off method for their financial statements.
• B)Companies are required to use the direct write-off method for federal income tax purposes.
• C)A company records the Uncollectible-Account Expense when it writes off an individual account receivable.
• D)Both B and C.

---

Definitions:

Allocating

The process of assigning or distributing resources or costs among various accounts, projects, or entities.

Residual Income

The amount of income that an individual or company has after all personal debts and expenses, including the cost of capital, have been paid.

Performance Measure

Criteria or benchmarks used to assess and compare the efficiency, effectiveness, and productivity of operations within an organization.

Investment Turnover

A measure of a company's ability to generate sales from its investments in assets, typically indicating efficiency.