In applying the principles of expense recognition, companies should:
A record any estimates of uncollectible amounts as a direct reduction of revenues.
B exclude costs of intangible assets with indefinite useful lives.
C recognize credit losses on customer receivables when defaults occur.
Solution
B is correct. The two main types of long-lived assets whose costs are not allocated over time are land and those intangible assets with indefinite useful lives.
A is incorrect because a company records an estimate of uncollectible amounts as an expense on the income statement, not as a direct reduction of revenues.
C is incorrect because, under the matching principle, at the time revenue is recognized on a sale, a company is required to record an estimate of how much of the revenue will ultimately be uncollectible.
请老师帮助,解析下C选项为什么错误和B选项为什么正确?