Which of the following methods of accounting for uncollectible accounts matches sales with bad debts expense?

Question

Quizplus · Accepted Answer

The allowance method matches sales with bad debts expense by estimating the expected amount of uncollectible accounts and recording that amount as an expense in the same period as the related sales revenue. This results in a more accurate matching of expenses with revenues compared to the direct write-off method, which waits until a specific account is deemed uncollectible before recording the bad debt expense. The contra-asset method and reconciliation method are not methods of accounting for uncollectible accounts.

Which of the Following Methods of Accounting for Uncollectible Accounts