Which of the Following Statements Is True of the Direct

question 22

Multiple Choice

Which of the following statements is true of the direct write-off method?

• A)GAAP requires public companies to follow the direct write-off method.
• B)It provides better matching of revenues with expenses.
• C)It results in more accurate net income than any other method.
• D)It is only suitable for small companies that have very few uncollectible receivables.

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Definitions:

Base Year Amount

A reference figure used in economic and financial analysis, representing a specific year's data against which other years' data are compared.

Current Year Amount

The total financial figures, such as revenue, expenses, or profits, calculated for the company's ongoing fiscal year.

Percentage Increase

The rate of growth of a quantity, expressed as a fraction of its previous value and shown as a percentage.

Sales Data

Information related to the amount, timing, and composition of a company's sales.