For a Company with Significant Uncollectible Receivables,the Direct Write-Off Method

question 72

Multiple Choice

For a company with significant uncollectible receivables,the direct write-off method is unsuitable because ________.

• A) it overstates liabilities on the balance sheet
• B) it violates the matching principle
• C) it uses estimates for determining the bad debt expense
• D) companies are not able to track customer payment histories

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Definitions:

Cutting Off

Intentionally stopping blood flow or interrupting a process or activity.

Mediastinum

The central compartment of the thoracic cavity, located between the lungs and containing the heart, trachea, esophagus, and other vital structures.

Body Cavities

Hollow spaces within the human body that house organs and provide protection, support, and space for organ development and function.

Thoracic Cavity

The part of the body enclosed by the ribs, sternum, and vertebral column, containing the lungs and heart.