The direct write-off method always adheres to the matching principle.

Question

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The direct write-off method does not adhere to the matching principle because the bad debt expense is not recognized in the same period as the related revenue. Instead, it is recognized in the period when the account is determined to be uncollectible. The allowance method, on the other hand, adheres to the matching principle as it estimates and records bad debt expense in the same period as the related revenue, even though the actual bad debts may not be known at that time.

The Direct Write-Off Method Always Adheres to the Matching Principle