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

question 97

Essay

Griggs Company uses the direct write-off method of accounting for uncollectible accounts receivable. On December 6, Year 1, Griggs sold $6,300 of merchandise to the Hillman Company. On August 8, Year 2, after numerous attempts to collect the account, Griggs determined that the $6,300 account of the Hillman Company was uncollectible.
a. Prepare the journal entry required to record the transactions on August 8.
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:

Handedness

The preferential use of one hand over the other for performing tasks, typically categorized as right-handed, left-handed, or ambidextrous.

Cognitive Advantages

The benefits or superiorities in cognitive functioning, such as enhanced memory, problem-solving skills, or faster processing speeds, which may result from various developmental, educational, or biological factors.

Right Hemisphere

The right hemisphere of the brain is responsible for controlling the left side of the body, and is typically associated with creativity, imagination, and spatial abilities.

Visual-Spatial Functions

Cognitive processes involved in the interpretation, manipulation, and utilization of visual information to understand spatial relationships.