Bad debt expense is recognized in the same accounting period as the revenue that is related to the receivable because:
A)the accounts receivable asset should be stated at original cost.
B)the exact amount of the losses from bad debts is known.
C)revenues should be stated at realizable value plus interest.
D)all expenses incurred in the current period should be subtracted from current period revenues.

Question

Quizplus · Accepted Answer

This is in accordance with the matching principle, which states that expenses should be recognized in the same period as the revenues they help to generate.

Bad Debt Expense Is Recognized in the Same Accounting Period