The expense recognition principle indicates:
A)where expenses should be presented on the income statement.
B)how expenses should be split between the income statement and the balance sheet.
C)the ordering of current assets and current liabilities on the balance sheet.
D)when costs are recognized as expenses on the income statement.

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 a result,it indicates when costs are recognized as expenses on the income statement.

The Expense Recognition Principle Indicates