The recognition of cost of goods sold as an expense in the same period that sales revenue is recognized from the sale of merchandise is a good example of the
A)matching principle.
B)full disclosure principle.
C)revenue realization principle.
D)historical cost principle.

Question

Quizplus · Accepted Answer

The recognition of cost of goods sold as an expense in the same period that sales revenue is recognized from the sale of merchandise is an application of the matching principle, which states that expenses should be recognized in the same period in which the related revenues are recognized. This ensures that the financial statements accurately reflect the performance of the business during a specific period.

The Recognition of Cost of Goods Sold as an Expense