Question

The revenue principle Requires recording of bad debt expense same accounting period in which the related sales are made.

a.True
b.False

Answer 1

The revenue principle requires recording of bad debt expense in the same accounting period as the related sales.

Step-by-step explanation:

The revenue principle requires recording of bad debt expense in the same accounting period in which the related sales are made.

This means that if a company makes sales and expects that some of those sales will not be collected, it should recognize the bad debt expense in the same period as the sales.

For example, if a company makes $10,000 in sales in January and estimates that 2% of those sales will end up as bad debts, it should record $200 as bad debt expense in January.