Question

True or false: GAAP require end-of-period adjustments for the estimated bad debts in the period of the credit sale even though the specific, non-paying customers have not yet been identified. True false question. True False

Answer 1

The given statement can be marked as true because the expense recognition principle requires an estimated expense be reported in the same period as the related credit sale rather than later when the customer is identified.

What is the GAAP?

GAAP refers to the Generally Accepted Accounting Principles, which is a set of collection of rules and procedures for financial reporting.

The purpose of GAAP is to create a consistent and comparable method of accounting which ensures that a company's financial records are complete and homogeneous.

It also gives a complete picture of the company's financial position.

Learn more about the GAAP here:-

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