In November,Ellie Company bought supplies on account for $480,with payment due to the supplier in 90 days.The supplies were used for products made and delivered in November.In which month should Ellie Company record the cost of the supplies as an expense?

Question

Quizplus · Accepted Answer

The expense recognition principle ("matching")is the practice under accrual basis accounting to record expenses in the same period as the revenues they generate,not necessarily the period in which cash is paid for them.The cost of the supplies should be expensed in November when the supplies are used.

In November,Ellie Company Bought Supplies on Account for $480,with Payment