Which principle of accounting prescribes the use of the allowance method of accounting for bad debts?

Question

Quizplus · Accepted Answer

The use of the allowance method of accounting for bad debts is prescribed by the matching principle, which requires expenses to be recognized in the same accounting period as the related revenues. Under the allowance method, an estimate of the amount of potentially uncollectible accounts is recorded as an expense in the same accounting period in which the related sales were made, matching the expense with the revenue.

Which Principle of Accounting Prescribes the Use of the Allowance