1. What is wrong with the direct write off method of accounting for un collectibles?

a. The direct write off method overstates assets on the balance sheet.

b. The direct write off method does not match expenses against revenue very well.

c. The direct write off method does not set up an allowance for un collectibles.

d. All of the above

2. At January 31, you have a $8,400 note receivable from a customer. Interest of 10% has accrued for 10 months on the note. What will your financial statements report for this situation?

a. The balance sheet will report the note receivable of $8,400.

b. The balance sheet will report the note receivable of $8,400 and interest receivable of $700.

c. Nothing, because you have not received the cash yet.

d. The income statement will report a note receivable of $8,400.