Two accounting principles central to accrual accounting basis that are relied on in the adjusting process are:

A) Revenue recognition and monetary unit.
B) Revenue recognition and going-concern.
C) Expense recognition (matching) and cost.
D) Expense recognition (matching) and business entity.
E) Revenue recognition and Expense recognition (matching) .

Question

Ahsan Habib · Accepted Answer

Final Answer : E, Explanation :  The two accounting principles central to accrual accounting basis that are relied on in the adjusting process are revenue recognition and expense recognition (matching). Revenue recognition requires that revenues be recognized in the period in which they are earned, regardless of when payment is received. Expense recognition (matching) requires that expenses be recognized in the period in which they are incurred, regardless of when payment is made. Therefore, choice E (Revenue recognition and Expense recognition (matching)) is the best answer.

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