The Direct Write-Off Method Is Generally Not Permitted for Financial

question 141

Multiple Choice

The direct write-off method is generally not permitted for financial reporting purposes because:

• A)Compared to the allowance method,it would allow greater flexibility to managers in manipulating reported net income?
• B)This method is primarily used for tax purposes.
• C)It is too difficult to accurately estimate future bad debts.
• D)Expenses (bad debts)are not properly matched with the revenues (credit sales)that they help to generate.

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Definitions:

Productivity

The efficiency at which goods or services are produced, often measured in terms of output per unit of input.

Experimental Group

A group of subjects in an experiment who are exposed to the variable under study.

Low-Fat Diet

A dietary approach that reduces the intake of fat, especially saturated fat and cholesterol, to promote heart health and possibly aid in weight loss.

Control Group

A control group is a group in an experiment that does not receive the experimental treatment, allowing researchers to measure the effect of the treatment by comparison.