Which of the following approaches to determine bad debts expense best achieves the matching concept?
A) percentage of sales
B) percentage of ending accounts receivable
C) percentage of average accounts receivable
D) direct write off

Question

Quizplus · Accepted Answer

The percentage of sales method best achieves the matching concept because it matches bad debts expense to the period in which the related sales occurred, ensuring that expenses are recognized in the same period as the revenues they helped generate.

Which of the Following Approaches to Determine Bad Debts Expense