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The two approaches to determining the credit loss expense on accounts receivable are the direct write-off method and the allowance method. Indicate the method that
The two approaches to determining the credit loss expense on accounts receivable are the direct write-off method and the allowance method. Indicate the method that corresponds to the description by selecting the appropriate circle.
DescriptionDirect write-offAllowance1. This method is not consistent with the matching principle.2. This method is acceptable under GAAP.3. This method does not state receivables at net realizable value.4. No immediate charge to expense is made when accounts are written off.5. Write-offs do not affect the carrying amount of net accounts receivableStep by Step Solution
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