Final answer:
The allowance method based on a percentage of total credit sales best achieves the matching concept, as it aligns bad debt expenses with the revenue generated within the same accounting period.
Step-by-step explanation:
The question relates to the concept of matching principle in accounting which recommends that expenses should be recorded in the same period as the revenues they helped to generate. Within the context of recording bad debt expenses, the method that best achieves the matching concept is b) the Allowance method based on a percentage of total credit sales.
This method involves estimating future bad debt expense based on historical percentages of credit sales that eventually became uncollectible. By applying this percentage to the period's credit sales, it closely matches the expense to the revenues directly associated with those sales. Thus, it ensures that expenses related to bad debts are reflected in the same period as the corresponding sales revenue, effectively adhering to the matching principle.
Options a), c), and d) do not align with the matching concept as accurately as option b). The direct write-off method recognizes bad debt expense only when specific accounts are deemed uncollectible, which could be in a different period than when the sales were made. The allowance methods based on a percentage of accounts receivable or ending inventory may match the expense with the asset valuation but not necessarily with the period the revenue was earned.