When Using the Direct Write-Off Method of Accounting for Uncollectible

question 115

True/False

When using the direct write-off method of accounting for uncollectible receivables, the account Allowance for Doubtful Accounts is debited when a specific account is determined to be uncollectible.

---

Definitions:

Business Combination

An event in which multiple entities combine to form a single entity, typically to enhance competitive positioning and operational efficiency.

Acquisition

The process of obtaining ownership or control of another company or business entity.

Deferred Tax Liability

It's a tax obligation that arises from income already earned and recorded for accounting purposes, but payment is deferred to the IRS until a future date.

Subsidiary

An entity that is controlled by a higher entity, usually through majority shareholding, and is included in the financial statements of the controlling entity through consolidation.