Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 16 - No. 47)

Which accounting concept is most relevant when recognizing an estimated loss from a potential bad debt?

Going Concern

Matching Principle

Materiality

Consistency

Explanation

The matching principle requires that expenses are matched to the revenues they help generate in the same accounting period. A provision for a potential bad debt is an expense matched against the revenue from the sale.

Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 16 - No. 47)

Explanation

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