Paige Turner Publishing's employees worked the last 3 days of December 2016,that they will not be paid for until January 2017.According to the matching principle,Paige Turner Publishing should recognize the wages expense for the last 3 days of 2016
A) in 2016 when the employees worked.
B) in 2017 when they were paid.
C) half in 2016 and half in 2017.
D) in whichever year the management wants to.

Question

Quizplus · Accepted Answer

According to the matching principle, expenses should be recognized in the same period as the revenues they help to generate. In this case, the wages expense helped to generate revenue in 2016, so it should be recognized in 2016 when the employees worked, even though they will not be paid until January 2017.

Paige Turner Publishing's Employees Worked the Last 3 Days of December