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:

Monopolistic Competition

A market structure characterized by the presence of many firms that sell similar but not identical products, allowing for slight differentiation among products.

Legal Assistance

Professional legal support and services provided to individuals or organizations, often to help navigate legal issues or disputes.

Homogeneous Oligopoly

An oligopoly in which firms produce a standardized product.

Countervailing Power

The ability of a market participant or group to counteract the power of another, leading to a balance and preventing monopolistic practices.