An objective of the expense recognition principle ("matching")is to have bad debt expense debited in:
A)the same period that the related accounts receivable is determined to be uncollectible.
B)the same period the related credit sales are recorded.
C)a later period after the related credit sales are recorded.
D)the period that a customer eventually becomes bankrupt.

Question

Quizplus · Accepted Answer

To comply with the expense recognition ("matching")principle,a company needs to record bad debts in the same period as the sale.The only way to do this is to record an estimate of the amount of bad debts that are likely to arise.Later,the accounting records can be adjusted when uncollectible amounts become known with certainty.

An Objective of the Expense Recognition Principle ("Matching")is to Have