Effect on the financial statements are less important


The matching principle requires:

1. That expenses be ignored if their effect on the financial statements are less important than revenues to the financial statement user

2. The use of the direct write-off method for bad debts

3. The use of the allowance method of accounting for bad debts

4. That bad debts be disclosed in the financial statements

5. That bad debts not be written off

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Accounting Basics: Effect on the financial statements are less important
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