The Matching Principle Permits the Use of the Direct Write-Off

question 194

True/False

The matching principle permits the use of the direct write-off method of accounting for uncollectible accounts when bad debts are very large in relation to a company's other financial statement items such as sales and net income.

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Definitions:

Fungi

A kingdom of organisms that includes molds, yeasts, and mushrooms, which live by decomposing and absorbing the organic material in which they grow.

Lichens

Symbiotic associations between a fungus and a photosynthetic partner (usually an algae or cyanobacteria), living together on surfaces like rocks or trees.

Algae

A diverse group of photosynthetic organisms that are not necessarily closely related, ranging from unicellular microalgae to large multicellular forms, inhabiting both freshwater and marine environments.

Chytrid Fungi

A group of primitive pathogenic fungi that can infect amphibian skins, significantly contributing to global declines in amphibian populations.