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Under the direct write-off method bad debts are accounted for by the expenses showing only actual losses from uncollectibles. Disadvantages of the write-off method is that it can reduce the usefulness of both the income statement and the balance sheet.Some examples are mismatched expenses and uncollectible accounts. When the direct write-off method is used by a company,it can have an impact on it’s financial records. question Are companies allowed to use the direct write-off method? Why or why not?
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