Question

The direct write-off method of accounting for uncollectible accounts Group of answer choices a) emphasizes cash realizable value. b) emphasizes the historical cost principle. c) is not generally accepted as a basis for estimating bad debts. d) emphasizes balance sheet relationships. e) emphasizes the matching of expenses with revenues.

Answer 1

In general, the direct debit system for accounts not received is not recognized as a basis to calculate bad debts.

Option-c

Explanation:

However, some transactions may not be received on record. Customers are split, unable to pay, and usually lack the morals to conclude a half of the contract. Certainly, a corporation has legal recourse to seek to recover these accounts, but they often fail.

In addition, an accounting system to calculate and document these non-collectible products is required. Unrecoverable loans are often named "bad debts”. This method is a simple way of paying for purchased intangible assets. This method excludes a particular account payable at that time it is eventually considered uncollectible from bank records.