The use of the estimated bad debt expense and allowance accounts is required under which accounting concept?
A)The revenue recognition principle
B)The matching principle
C)The materiality constraint
D)The unit of measure assumption

Question

Quizplus · Accepted Answer

The use of the estimated bad debt expense and allowance accounts is required under the matching principle, which requires expenses to be recognized in the same period as the related revenues. By estimating and recording bad debt expense in the same period as the related sales revenue, the matching principle is achieved.

The Use of the Estimated Bad Debt Expense and Allowance