(Multiple Choice)

The allowance method generally is considered preferable to the direct write-off method because the allowance method:

A. recognizes expense when a specific account is determined to be uncollectible. B. reflects the actual facts as they have taken place. C. relies on estimates which are always accurate and stable among years. D. recognizes the expense of a bad debt in the same period as the sale.

(True or False)

An impairment occurs and is recognized when the owner of the asset no longer expects to be able to generate returns of cash from the asset sufficient to recapture its recorded net book value.