Question

The direct write-off method is generally not permitted for financial reporting purposes because

Answer 1

Because it goes against the established matching principle of accounting, the direct write-off method is generally not permitted for financial reporting purposes.

What is the matching principle in accounting?

This principle basically says for every credit entry on the balance sheet, a corresponding debit entry should be placed. In other words, in any financial report, expenses should be tied together with income/revenue in other to make the financial state of the business clearer. Hence, using a direct write-off method would go against this accounting principle.

You can learn more about the matching principle here brainly.com/question/15700799

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