Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 39 - No. 1)
What is the primary characteristic of the direct write-off method for bad debts?
Estimates uncollectible amounts.
Matches expense with revenues.
Recognizes bad debt expense only when an account is determined to be uncollectible.
Uses an allowance account.
Explanation
The direct write-off method waits until a debt is uncollectible before recognizing the expense.
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