Asked by
Kasandra Medina
on Oct 16, 2024Verified
The broad principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses is the:
A) Recognition principle.
B) Cost principle.
C) Cash basis of accounting.
D) Expense recognition (Matching) principle.
E) Time period principle.
Expense Recognition Principle
An accounting principle that expenses should be recognized and recorded at the time they are incurred, not necessarily when cash is paid.
Recognition Principle
An accounting concept dictating that revenue should be recognized in the income statement when it is realized or realizable and earned, not necessarily when cash is received.
Time Period Principle
An accounting principle stating that financial reporting should be done in regular intervals to ensure relevance and reliability.
- Understand the fundamentals of accrual basis accounting, encompassing the recognition of revenue and the application of matching principles.
Verified Answer
AM
Learning Objectives
- Understand the fundamentals of accrual basis accounting, encompassing the recognition of revenue and the application of matching principles.