The expense recognition principle requires the recognition of expenses:

Question

Quizplus · Accepted Answer

The expense recognition principle, also known as the matching principle, requires that expenses should be recognized in the same period in which the related revenues are earned. This means that expenses should be recognized when they contribute to the generation of revenue, regardless of when they are paid. This principle ensures that financial statements reflect the true economic performance of the company by matching expenses with the revenues they help to generate. Therefore, choice A is the best choice.

The Expense Recognition Principle Requires the Recognition of Expenses