Mega Loan Company Has Very Stringent Credit Requirements And, Accordingly

Multiple Choice

Mega Loan Company has very stringent credit requirements and, accordingly, has negligible losses from uncollectible accounts. The company's independent accountants did not protest when, contrary to GAAP, the company recorded bad debt expense only when specific accounts were determined to be uncollectible, rather than use an allowance for uncollectible accounts. The concept demonstrated is:

A) Comparability.
B) Representational faithfulness.
C) Cost effectiveness.
D) Materiality.