When Comparing the Direct Write-Off Method and the Allowance Method

question 60

Multiple Choice

When comparing the direct write-off method and the allowance method of accounting for uncollectible receivables, a major difference is that the direct write-off method

• A) uses a percentage of sales method to estimate uncollectible accounts.
• B) is used primarily by large companies with many receivables.
• C) is used primarily by small companies with few receivables.
• D) uses an allowance account.

---

Definitions:

Golf Ball

A small, dimpled ball designed specifically for the game of golf, optimized for distance, flight stability, and control.

Geographical Markets

Areas or locations where products or services are marketed, each with its own set of customers with distinct needs and characteristics.

Pharmaceutical Companies

Businesses licensed to research, develop, market, and distribute drugs in the healthcare sector, often focusing on novel or generic drug manufacturing.

BRIC Countries

An acronym for Brazil, Russia, India, and China, referring to rapidly developing countries considered as emerging markets or economic giants.