Which of the following best describes the expense recognition principle?
A)It requires expenses to be recorded when they are paid for.
B)It requires expenses to be recorded when incurred to generate revenues.
C)It requires expenses to be recorded consistent with the cash basis of accounting.
D)It does not allow expenses to be recorded if they are incurred prior to being paiD.The expense recognition principle requires that expenses be recorded when incurred in generating revenue.

Question

Quizplus · Accepted Answer

The expense recognition principle requires that expenses be recorded when they are incurred to generate revenues. This is also known as the matching principle, which matches expenses with the revenues they help to generate in the same accounting period. This principle is followed for accrual basis accounting, as opposed to cash basis accounting.

Which of the Following Best Describes the Expense Recognition Principle