Which of the Following Statements Is TRUE of the Direct

question 58

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:

Tax Revenue

The wealth gathered by governments by imposing taxes.

Excise Tax

A tax levied on specific goods or commodities produced or sold within a country.

Incidence Of Tax

The analysis of who bears the ultimate burden of a tax, whether it be consumers, producers, or others.

Excise Tax

A tax levied on the sale or use of specific products or transactions, often included in the price of goods like gasoline, alcohol, and tobacco.