The expense recognition principle requires that expenses be recorded and reported in the same period as the revenue that it helped to generate.

Question

Quizplus · Accepted Answer

The statement is true. The expense recognition principle is also known as the matching principle, and it ensures that expenses are matched to the revenue they helped to generate in the same accounting period. This is important for accurate financial reporting and calculating net income.

The Expense Recognition Principle Requires That Expenses Be Recorded and Reported