IIA Exam IIA-CIA-Part3 Topic 6 Question 97 Discussion

Actual exam question for IIA's IIA-CIA-Part3 exam

Question #: 97
Topic #: 6

Senior management is trying to decide whether to use the direct write-off or allowance method for recording bad debt on accounts receivables. Which of the following would be the best argument for using the direct write-off method?

AIt is useful when losses are considered insignificant.

BIt provides a better alignment with revenue.

CIt is the preferred method according to The IIA.

DIt states receivables at net realizable value on the balance sheet.

Show Suggested Answer

Suggested Answer: D

by Eve at Jan 25, 2025, 03:29 PM

Limited Time Offer

25%

Off

Get Premium IIA-CIA-Part3 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Annita

7 days ago

A) The direct write-off method is useful when losses are considered insignificant. That's a fair point, but I'm not sure that's the best argument here. Doesn't it just delay recognizing the true state of the company's finances?

upvoted 0 times

...