Which of the following would be reported on the income statement for 2005?

Question

Quizplus · Accepted Answer

Supplies that were purchased and used in 2005 but paid for in 2004 are reported on the income statement for 2005 because expenses are recognized when incurred (used), not when paid. This aligns with the matching principle of accounting, which states that expenses should be matched with the revenues they help to generate in the period in which those revenues are recognized. Choices A and B are incorrect because supplies paid for in 2005 but used in 2004 do not affect the 2005 income statement, and dividends paid are not an expense but a distribution of earnings and are not reported on the income statement.

Which of the Following Would Be Reported on the Income