Question

Griggs Company uses the direct write-off method of accounting for uncollectible accounts receivable. On December 6, 2008. Griggs sold $6.300 of merchandise to the Hillman Company. One August 8, 2009, after numerous attempts to collect the account, Griggs determined that the $6, 300 account of the Hillman Company was uncollectible. a. Prepare the journal entry required to record the transactions on August 8. b. Assuming that the $6, 300 is materiel, explain how the direct write-off method violates the matching principle in this case.