Advantages And Disadvantages of the Direct Write Off Method
Direct Off Method has some advantages and some disadvantages (Weaknesses). These are briefly explained below: Benefits / Advantages of Direct Off Method 1. The main advantage is that it is easy to follow as there is no need of estimating of Uncollectible Accounts . Only when the company has sure that unpaid amount become Actual Bad Debts that need to be written off. You Can Also Read Out, “ Advantages And Disadvantages of Allowance Method ” 2. It is less expensive and time consuming as there is no need to prepare Accounts Receivable Aging Report . If there are large number of customers’ data which is costly for Accounting Department i.e. more work and time is required and highly salaries are required for doing that work. 3. This method is suitable for those organizations whose deals with their clients on Cash Basis i.e. Cash is received when services are delivered to customers. Examples of Such Organizations ...