The Materiality Constraint, as Applied to Bad Debts

question 158

Multiple Choice

The materiality constraint, as applied to bad debts:

• A) Requires that bad debts not be written off.
• B) Requires use of the direct write-off method.
• C) Requires use of the allowance method for bad debts.
• D) Requires that expenses be reported in the same period as the sales they helped produce.
• E) Permits the use of the direct write-off method when bad debts expenses are relatively small.

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