Under the allowance method,a company must record the bad debt expense in the same period in which the credit sales were recorded.

Question

Quizplus · Accepted Answer

Under the allowance method, the bad debt expense is estimated and recorded in the same period in which the credit sales were recorded, even though the actual collection of cash may occur in a different period. This is in accordance with the matching principle of accounting.

Under the Allowance Method,a Company Must Record the Bad Debt