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

question 62

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:

Medical Model

A framework that views psychological disorders as the result of biological factors and treats them with medical interventions.

Abnormal Behaviour

Actions, thoughts, or emotions that are considered deviant by society's standards, potentially interfering with an individual's functioning.

Avoidance-Avoidance Conflict

A psychological situation involving a choice between two negative or undesirable options.

Risk-Aversion Conflict

The psychological struggle or decision-making dilemma faced when avoiding risk leads to potential gains being missed or minimized.