The expense recognition (matching) principle, as applied to bad debts, requires:
A. That bad debts be disclosed in the financial statements.
B. That expenses be ignored if their effect on the financial statements is unimportant to users' business decisions.
C. The use of the allowance method of accounting for bad debts.
D. That bad debts not be written off.
E. The use of the direct write-off method for bad debts.
Answer: C
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What will be an ideal response?
Dickinson Company owns a delivery truck that costs $108,000, has an estimated salvage value of $8,000, and will provide 200,000 miles of use before retirement. If the truck operates 24,000 miles in a given year, the straight-line (use) depreciation charge is
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