Question

The allowance for doubtful accounts, which appears as a deduction from accounts receivable on a balance sheet and which is based on an estimate of bad debts, is an application of the?
a.revenue recognition principle
b.expense recognition principle
c.materiality quality
d.consistency characteristic

Answer 1

The answer is "b.expense recognition principle".

The expense recognition principle expresses that costs ought to be perceived in indistinguishable period from the incomes to which they relate. On the off chance that this were not the situation, costs would probably be perceived as acquired, which may originate before or take after the period in which the related measure of income is perceived.  

The expense recognition principle is a center component of the gathering premise of bookkeeping, which holds that incomes are perceived when earned and costs when devoured. On the off chance that a business were to rather perceive costs when it pays providers, this is known as the money premise of accounting.