Working capital

Working capital

Answer # 1

This method fails to match the cost with the revenues for a particular period along with that it does not show the net value of the receivables in the balance sheet. It is an accounting method in which the bad debts are charged off. In Direct Write off the actual amount that is not collectible accounts receivable is deducted from the sales revenue in the accounting period, in this period they are determined that these are no collectible and also instead for the creation of provision for them in that particular period in which sales have been ...