If the Direct Write-Off Method Is Used to Account for Uncollectible

question 54

Multiple Choice

If the direct write-off method is used to account for uncollectible accounts,which of the following statements is false?

• A)An allowance account is not used.
• B)No adjustment is made at the end of the year to estimate future uncollectible accounts.
• C)Accounts receivable will be reported at its net realizable value.
• D)Bad debt expense is recorded at the time an actual bad debt is written-off.

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Definitions:

File System

Defines how data is stored on a drive. Examples of file systems include FAT16, FAT32, exFAT, and NTFS.

NTFS

New Technology File System, a file system used by Windows operating systems designed for storing and accessing files on a hard disk with support for large volumes, encryption, and detailed security permissions.

exFAT

A file system type that improves upon FAT32 by having a theoretical maximum file size of 16 EB, maximum volume size of 64 ZB (but 512 TB is the current limit), smaller cluster sizes than FAT32, and an increased number of files allowed in a directory. Created for external storage media such as flash drives and hard drives for saving images/video.

FAT32

A file system that supports hard drives up to 2 TB in size.