Answer :
Answer:
In direct write off method following entry is passed
Dr: Bad debts expense
Cr: To accounts receivable
Explanation:
- It does not account for any provision
- It is against matching principle i.e. expense needs to match with revenue generated
- Ignoring matching principle and prudence concept, it results in financial statements that does not give true & fair view
- It does not allow chances to get collections from customers, as occurs in allowance method