If a Company Uses the Direct Write-Off Method of Accounting

question 133

Multiple Choice

If a company uses the direct write-off method of accounting for bad debts,

• A)it is applying the matching principle.
• B)it will record bad debts expense only when an account is determined to be uncollectible.
• C)it will reduce the Accounts Receivable account at the end of the accounting period for estimated uncollectible accounts.
• D)it will report accounts receivable on the balance sheet at their net realizable value.

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Definitions:

Photosynthesis

The process by which green plants and some other organisms use sunlight to synthesize nutrients from carbon dioxide and water, generating oxygen as a byproduct.

Anaerobic

Growing or metabolizing in the absence of molecular oxygen. Compare with aerobic.

Few Organisms

A term referring to a small number or limited diversity of living entities in a given area or ecosystem.

Mineral Rich

Referring to a substance, soil, or area containing a beneficial concentration of minerals important for biological processes or commercial use.