Expenses should be recorded when they are paid, not when they have been incurred.

Question

Quizplus · Accepted Answer

Expenses should be recorded when they are incurred, not necessarily when they are paid. This is based on the accrual accounting method, where expenses are recognized when they are incurred, regardless of when cash is exchanged. This helps match expenses with the revenues they helped generate, providing a more accurate picture of a company's financial performance.

Expenses Should Be Recorded When They Are Paid, Not When