Which of the following best describes the application of generally accepted accounting principles to the valuation of accounts receivable?

مندرجہ ذیل میں سے کون سے قابل وصول اکاؤنٹس کی تشخیص کے لئے عام طور پر قبول شدہ اکاؤنٹنگ اصولوں کے اطلاق کی وضاحت کرتا ہے؟

Matching principle — The loss due to an uncollectible account is recognized in the period in which the sale is made, not in the period in which the account receivable is determined to be worthless.

Realization principle — Accounts receivable are shown at their net realizable value in the balance sheet.

Cost principle — Accounts receivable are shown at the initial cost of the merchandise to customers, less the cost the seller must pay to cover uncollectible accounts.

None of these

Explanation

The realization principle states that revenue is recognized when earned, and accounts receivable are reported at the amount expected to be collected (net realizable value).

This ensures that bad debts are accounted for, presenting a more accurate financial position.