Which of the following violates the matching principle?
A)Direct write-off method
B)Allowance method
C)Percentage of credit sales method
D)Aging of accounts receivable method

Question

Quizplus · Accepted Answer

The direct write-off method violates the matching principle because it only records bad debts when they are actually deemed uncollectible. This can result in a delay in recognizing the expense and mismatching it with the revenue that was earned when the sale was made. The allowance method, percentage of credit sales method, and aging of accounts receivable method are all methods that estimate bad debt expense and follow the matching principle more closely.

Which of the Following Violates the Matching Principle