Question

The matching principle, as applied to bad debts, requires:
a. that expenses be ignored if their effect on the financial statements is unimportant to users' business decisions.
b. the use of the direct write-off method for bad debts.
c. the use of the allowance method of accounting for bad debts.
d. that bad debts be disclosed in the financial statements.
e. that bad debts not be written off.

Answer 1

a. that expenses be ignored if their effect on the financial statements is unimportant to users' business decisions.
Matching principle is where expenses are said to be reported accordingly within a certain period.

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