Which of the following is talse? O If a company uses the percent of receivables

Question

Which of the following is talse? O If a company uses the percent of receivables method to estimate uncollectible accounts, the company will first determine the required ending balance in Allowance for Doubtful Accounts, and Uncollectible Accounts Expense will be the difference betiveen that amount and the current balance in the allowance. The direct write-off method of accounting for uncollectible accounts overstates assets on the balance sheet. The longer an account recenable has been outstanding, the less likely it is to be collected A company that uses the direct write-off method of accounting for uncollectible accounts must still prepare a year-end uncollectibles

Explanation / Answer

A company that uses the direct write off method for uncollectible accounts must still prepare a year-end adjusting entry to estimate its uncollectible is FALSE

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