Financial reporting systems emphasize cost incurrence by recognizing and recording costs only when a resource is sacrificed or consumed.

Question

Quizplus · Accepted Answer

Financial reporting systems follow the principle of cost incurrence, which means costs are recognized and recorded only when a resource is sacrificed or consumed in the generation of revenue. This is in line with the accrual basis of accounting, which aims to match revenues and expenses in the same accounting period. Therefore, the statement is true.

Financial Reporting Systems Emphasize Cost Incurrence by Recognizing and Recording