Companies follow both the matching principle and the materiality constraint when applying the direct write-off method.

Name: Companies follow both the matching principle and the materiality constraint when applying the direct write-off method.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The direct write-off method does not adhere to the matching principle because it recognizes bad debts expense only when an account is deemed uncollectible, which may not be in the same period when the revenue was earned.

Companies Follow Both the Matching Principle and the Materiality Constraint