Which of the Following Statements Is Not Correct

question 18

Multiple Choice

Which of the following statements is not correct?

• A) Under the direct write-off method,no provision is created when the risk of uncollectibility appears.
• B) All countries allow the direct write-off method.
• C) The direct write-off method shows receivables at their nominal value when in fact,there is a known risk of uncollectibility.
• D) The only situation where the direct write-off method might not create a misrepresentation of the financial situation of the firm is when the sales revenue and the percentage of uncollectible receivables is essentially constant or stable.

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