The revenue/expense approach emphasizes determining the appropriate amounts of revenue and expense in each reporting period.

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The revenue/expense approach is a fundamental accounting principle that requires companies to recognize revenue and expenses during the period in which they occurred, regardless of when the cash is received or paid. This approach ensures that financial statements accurately reflect a company's performance and expenses during a specific period. Therefore, it emphasizes determining the appropriate amounts of revenue and expense in each reporting period.

The Revenue/expense Approach Emphasizes Determining the Appropriate Amounts of Revenue