The Direct Write-Off Method of Recognizing Uncollectible Accounts Expense

question 75

Multiple Choice

The direct write-off method of recognizing uncollectible accounts expense:

• A)Is acceptable only when most of the company's sales are on credit.
• B)Records uncollectible accounts expense when individual accounts receivable are determined to be worthless.
• C)Records uncollectible accounts expense when customers exceed their credit limits.
• D)Uses a valuation account to record specific customer accounts deemed uncollectible.

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Definitions:

Customer Retention

The activities and actions companies and organizations take to reduce the number of customer defections and to encourage loyalty among existing customers.

Long-Term Profits

The sustained earnings a company generates over an extended period, indicating its financial health and stability.

Product Excellence

Involves a focus on achieving high-quality products; effective branding and positioning is key.

In-Flight Entertainment

Systems provided by airlines to entertain passengers during flights through movies, TV shows, music, games, and internet connectivity.