A company does not need to record the receipt of a bill for utilities used during this year if the company will not pay the bill until next year.

Question

Quizplus · Accepted Answer

The expense recognition principle states that expenses should be recorded in the same period as the revenues they generate,not necessarily the period in which cash is paid for them.As such,an expense would be recorded this year since the utilities were used this year.

A Company Does Not Need to Record the Receipt of a Bill