Question
The direct write-off method is acceptable for financial reporting purposes only if the bad debt losses are insignificant. A.This is a false statement because the
The direct write-off method is acceptable for financial reporting purposes only if the bad debt losses are insignificant.
A.This is a false statement because the direct write-off method can only be used for tax reporting.
B.This is a true statement based on the concept of materiality.
C.This is a true statement because companies can choose either the direct write-off or the allowance method for financial reporting, as long as they consistently apply the method.
D.This is a false statement because the direct write-off method violates the matching principle.
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