Under the direct charge-off method of accounting for uncollectible accounts: - Expenses are recorded in the period the sale is made rather than when accounts are deemed uncollectible. - Accounts Receivable is reported at its net realizable value on the balance sheet. - An Allowance for Uncollectible Accounts does not exist since write-offs of uncollectible amounts are directly expensed.

1. 14. Under the direct charge-off method of dealing with uncollectible accounts,
a.
revenues and
expenses are
properly
matched.
b.
Accounts
Receivable is
shown on the
balance sheet
at net
realizable
value.
c.
Uncollectible
Accounts
Expense is
recorded in
the period of
the sale.
d.
no
Allowance
for
Uncollectible
Accounts
exists.
14. Under the direct charge-off method of dealing with uncollectible accounts,
a.
revenues and
expenses are
properly
matched.
b.
Accounts
Receivable is
shown on the
balance sheet
at net
realizable
value.
c.
Uncollectible
Accounts
Expense is
recorded in
the period of
the sale.
d.
no
Allowance

2. for
Uncollectible
Accounts
exists.
Solution
Answer:
There are two methods for writing off doubtful debts one is direct write-off methods and other is
allowances for doubtful debts.
In the allowances for uncollectible accounts method first an allowance is created by debiting bad
debts expenses and credited allowances for uncollectible accounts. However on the balance sheet
this allowances is shown as deduction form accounts receivables.
But in direct write off method Accounts receivables are credited directly instead of allowances
for uncollectible accounts and no allowances for uncollectible accounts is made .
Hence the answer shall be d. no Allowance for Uncollectible Accounts exists