Proper matching of revenues and expenses requires that bad debts be recorded as an expense of the period in which the sale was made.

Question

Quizplus · Accepted Answer

This is because the matching principle in accounting dictates that expenses should be recorded in the same period as the revenues they helped generate. Recording bad debts in the period of the sale aligns with this principle, ensuring that the expenses related to those sales are matched with the revenues they generated.

Proper Matching of Revenues and Expenses Requires That Bad Debts