asked 92.7k views
0 votes
The direct write-off method in accounting is based on factual information and does not involve any estimation procedures. True or False?

1 Answer

3 votes

Final answer:

The direct write-off method in accounting is not based on factual information and does involve estimation procedures.

Step-by-step explanation:

The statement is False.

The direct write-off method in accounting is a method of recording bad debts when they are deemed uncollectible. Under this method, bad debts are directly written off as an expense in the period they are identified. This method does not involve any estimation procedures and is based on factual information.

However, it is important to note that the direct write-off method is not in compliance with generally accepted accounting principles (GAAP) and is typically used only for small, insignificant bad debts.

answered
User Mattobob
by
7.9k points
Welcome to Qamnty — a place to ask, share, and grow together. Join our community and get real answers from real people.