Monaco Lawn Service Company used $250 of fuel to mow customer lawns in June. The fuel was purchased on account and due in July. Fuel Expense should be recorded in:

Question

Quizplus · Accepted Answer

According to the matching principle in accounting, expenses should be recorded in the period in which they are incurred to generate revenues. Since the fuel was used in June, the fuel expense should be recorded in June, even though the payment is due in July.

Monaco Lawn Service Company Used $250 of Fuel to Mow