Welles Company Uses the Direct Write-Off Method of Accounting for Uncollectible

question 72

Essay

Welles Company uses the direct write-off method of accounting for uncollectible accounts receivable.On December 6,2010,Welles sold $6,300 of merchandise to the Fleming Company.On August 8,2011,after numerous attempts to collect the account,Welles determined that the $6,300 account of the Fleming Company was uncollectible.
A.Prepare the general journal entries required to record the transactions on August 8,2011
B.Assuming that the $6,300 is material,explain how the direct write-off method violates the matching principle in this case

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Definitions:

Upward Social Comparisons

The process of comparing oneself with others who are perceived to be better off or more successful, often influencing self-esteem.

Downward Social Comparisons

A self-evaluation tactic where individuals compare themselves to others who are less competent or in a worse situation, often to feel better about themselves.

Self-Esteem

An individual's subjective evaluation of their own worth or value.

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