The expense recognition principle relates to credit losses by stating that bad debt expense should be recorded
A)in the same period as allowed for tax purposes.
B)in the period of the sale.
C)for an exact amount.
D)in the period of the loss.

Question

Quizplus · Accepted Answer

The expense recognition principle, also known as the matching principle, requires that expenses be recorded in the same period as the revenues they help to generate. Therefore, bad debt expense should be recorded in the period of the sale, as it relates to the revenue recognized from that sale.

The Expense Recognition Principle Relates to Credit Losses by Stating