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Michelle Gifford
on Nov 18, 2024

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When accounting for uncollectible receivables and using the percentage of sales method, the matching principle is violated.

Percentage of Sales Method

A financial forecasting model that bases future variables, like expenses and income, on a percentage of sales.

Matching Principle

A concept of accounting in which expenses are matched with the revenue generated during a period by those expenses.

Uncollectible Receivables

Accounts receivable that a company does not expect to collect due to customers’ inability to pay, often written off as a bad debt expense.

  • Comprehend how various accounting practices influence the financial reports and the earnings of a company.
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Cecil MarbasNov 22, 2024
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