Direct write-off method violates the matching principle.

Name: Direct write-off method violates the matching principle.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The direct write-off method records bad debt expense only when a specific account is deemed uncollectible. This violates the matching principle, which requires expenses to be matched with the revenues they generate. The bad debt expense should be recognized in the same period as the related revenue, following the allowance method.

Direct Write-Off Method Violates the Matching Principle