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    Avieira303's Avatar
    Avieira303 Posts: 1, Reputation: 1
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    #1

    Jan 31, 2008, 02:15 PM
    Direct Write-Off Method and A/R
    If I am using the Direct Write-Off method with a balance of A/R - $160,000.00 and am writing off $2400.00. My question is does the company expect to collect the full amount. I know with the Allowance method they have a net receivable which is a/r minus allowable and then the net they expect to collect. I am not sure if using the Direct Write-Off Method they expect to receive it.
    MaggieMouse's Avatar
    MaggieMouse Posts: 226, Reputation: 8
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    #2

    Feb 2, 2008, 10:55 AM
    Direct write-off method means write it off when it OCCURES. I guess when it occures means you decided you will never collect them, that's why you write it off.
    delite's Avatar
    delite Posts: 202, Reputation: 3
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    #3

    Feb 2, 2008, 10:42 PM
    Using the direct write-off methd is okay if the write-off is not customary. If writeoffs are inherent ito the business than reserves are apporpriate (for financial purposes).the purpose of having reserves is to anticapate some things going wrong over a period and write offs are over a well thought out peiod of time(reserves)Doing direct would distort financial picture (direct) as indicated above, a reserve will lessen the blow and not distort financial picture.
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