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The Direct Write-Off Method for accounting for bad debts is mainly flawed because: It violates...

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Accounting

The Direct Write-Off Method for accounting for bad debts is mainly flawed because:

It violates the Revenue Recognition principle

It violates the Matching Principle

It uses guesswork in estimating bad debts which may be misleading

It is very costly to implement due to the extensive estimates made, and therefore, violates the Cost-Benefit Concept

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