The direct write-off method is generally not acceptable because it: The direct write-off method is generally not acceptablebecause it:a) Overstates expensesb) Understates accounts receivablec) Does not match expenses with revenuesd) Is too complex

Explanation of the Direct Write-off Method: The direct write-off method is an accounting practice…

Answered: The direct write-off method is…

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter14: Accounting For Uncollectible Accounts Receivable

Section14.1: Uncollectible Accounts Receivable

Problem 2AYU

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Which of the following is a limitation of the direct write-off method of accounting for uncollectibles? a. The direct write-off method overstates assets on the balance sheet. b. The direct write-off method does not match expenses against revenue very well. c. The direct write-off method does not set up an allowance for uncollectibles. d. All of the above
The allowance for doubtful accounts is an example of a(n) Group of answer choices expense account control account adjunct account contra account
The allowance for doubtful is not: a. credited when bad debts expense is estimated and recorded b. a liability account c. used instead of reducing accounts receivable directly d. a contra asset account e. debited when uncollectible accounts are written off
The direct write-off method records bad debt expense when an account is determined to be uncollectible. OTrue False
The notes receivable is debited by the bookkeeper instead of accounts receivable. What is the effect of the error in the total assets of the entity? a. No effect b. Cannot be determined based on the given information c. Understated d. Overstated
Management is prone to overstate: a. accounts receivable and inventory. b. accounts receivable, but not inventory. c. inventory, but not accounts receivable. d. neither accounts receivable nor inventory.
Which of the following statements is false? Group of answer choices A)The journal entry to record bad debt expense decreases current assets. b)The journal entry to record bad debt expense decreases retained earnings. C)The journal entry to write-off an uncollectible account receivable decreases operating income. D)The journal entry to write-off an uncollectible account receivable does not affect current assets. e)All the above statements are correct.
The Direct Write-off method is the preferred method of accounting for uncollectible accounts according to GAAP. True False
Of what merit is the contention that the allowance methodlacks the objectivity of the direct write-off method? Discussin terms of accounting’s measurement function.
The allowance for doubtful accounts, which appears as a deduction from accounts receivable on a statement of financial position and which is based on an estimate of bad debts, is an application of which of the following? a. Expense recognition principle. b. Consistency characteristic. c. Materiality quality. O d. Revenue recognition principle.
The preferred method of accounting for uncollectible accounts is ? A) net realizable method. B) actual method. C) allowance method. D) direct write-off method.
A misstatement related to which of the following assertions means the dollar amount of the account balance is not correct. Existence All of the choices have that result Valuation Completeness

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The direct write-off method is generally not acceptable because it: a) Overstates expenses b) Understates accounts receivable c) Does not match expenses with revenues d) Is too complex