The direct write-off method of accounting for uncollectible accounts A. emphasizes balance sheet relationships. B. is often used by small companies and companies with few receivables. C. emphasizes cash realizable value. D. emphasizes the matching of expenses with revenues

Question

Business

Hazel Fletcher

26 August, 08:50

The direct write-off method of accounting for uncollectible accounts A. emphasizes balance sheet relationships. B. is often used by small companies and companies with few receivables. C. emphasizes cash realizable value. D. emphasizes the matching of expenses with revenues

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Answers (1)

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Hector Guerra · Answer 1

B. is often used by small companies and companies with few receivables

Explanation:

As there is no a high amount of customer accounts, and the business is small the distorsions generates by the direct method are not as high as in a large business

D false. the direct method violates the matching principles as the bad debt expense is associate with a revenue of a prior period.

A and C false. the direct method do not calcualte any allowance, therefore it do not emphasizes any method of receivables metric.