Ask Experts Questions for FREE Help !
Ask
    Avieira303's Avatar
    Avieira303 Posts: 1, Reputation: 1
    New Member
     
    #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
    Full Member
     
    #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
    Full Member
     
    #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.

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Direct Write off method [ 1 Answers ]

Please tell me if I'm answering the following question correct. On May 1, EZ Plumbing buys materials with a list price of $550. At the time of the purchase, EZ gives Halpin a check for $225 and asks Halpin to put the remainder of the purchase on its account, which already has a balance of $475. On...

Direct write off method [ 1 Answers ]

Write -offs of uncollectible accounts receivable, $? Solve for the amount of write offs

Direct Write Off Method [ 2 Answers ]

When you're using he direct write off method, do you decrease the AR balance and net income?


View more questions Search