When should the loss on an uncollectible account receivable be recorded as an expense for accrual accounting purposes?
A) When it is determined that an account cannot be collected.
B) In the same period in which the sale on account occurs.
C) When the balance is past due for more than 3 months.
D) When a lawyer indicates that collection efforts would cost more than the account is worth.

Question

Quizplus · Accepted Answer

In accrual accounting, expenses are recognized in the same period as the revenues they help to generate. Therefore, the loss on an uncollectible account should be recorded in the same period in which the sale on account occurs, following the matching principle.

When Should the Loss on an Uncollectible Account Receivable Be