Final answer:
A credit memo is not a document used internally to write off uncollectible accounts; it is issued to adjust the amount owed by a buyer for reasons such as returns or discounts. (option B)
Step-by-step explanation:
The answer to the question is B) False. A credit memo is not an internal document indicating authority to write off an account receivable as uncollectible. The correct way to handle uncollectible accounts is through a bad debt expense adjustment. Instead, a credit memo is typically issued by a seller to a buyer, reducing the amount the buyer owes to the seller under the terms of an invoice. This might occur if goods are returned, if there was a pricing dispute that was settled in the buyer's favor, or if the seller wishes to grant a discount to the buyer for any reason.
On the other hand, the write-off of an account receivable as uncollectible is typically handled through an accounting adjustment called a bad debt expense, which removes the uncollectible amount from the company's books.