Question

The expense recognition (matching) principle, as applied to bad debts, requires: multiple choice that expenses be ignored if their effect on the financial statements is unimportant to users' business decisions. the use of the direct write-off method for bad debts. the use of the allowance method of accounting for bad debts. that bad debts be disclosed in the financial statements. that bad debts not be written off.

Answer 1

The expense recognition (matching) principle, as applied to bad debts, requires: the use of the direct write-off method for bad debts.

The matching principle is aa basic guideline in accounting. This principle is used to determine where debts need to go when accrual journals and adjusting entries are being made for a companies reports. The direct write-off method where a company immediately charges off bad debt from sales revenue.