QuestionAugust 5, 2025

The direct write-off method of accounting for uncollectible accounts follows the accrual concept of accounting more closely than does the allowance method of accounting for uncollectible accounts. True False

The direct write-off method of accounting for uncollectible accounts follows the accrual concept of accounting more closely than does the allowance method of accounting for uncollectible accounts. True False
The direct write-off method of accounting for uncollectible accounts follows the accrual concept of accounting more closely than does the allowance method of accounting for uncollectible accounts. True False

Solution
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Answer

False Explanation 1. Understand the Direct Write-off Method The direct write-off method records bad debt expense only when a specific account is deemed uncollectible, not matching expenses with revenues in the same period. 2. Understand the Allowance Method The allowance method estimates uncollectible accounts at the end of each period, aligning expenses with revenues, following the accrual accounting concept. 3. Compare Methods with Accrual Concept The accrual concept requires matching expenses with related revenues. The allowance method aligns with this by estimating bad debts in advance, unlike the direct write-off method.

Explanation

1. Understand the Direct Write-off Method<br /> The direct write-off method records bad debt expense only when a specific account is deemed uncollectible, not matching expenses with revenues in the same period.<br /><br />2. Understand the Allowance Method<br /> The allowance method estimates uncollectible accounts at the end of each period, aligning expenses with revenues, following the accrual accounting concept.<br /><br />3. Compare Methods with Accrual Concept<br /> The accrual concept requires matching expenses with related revenues. The allowance method aligns with this by estimating bad debts in advance, unlike the direct write-off method.
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