Following the expense recognition principle,to recognize expenses along with the related revenues,means to:

Question

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The expense recognition principle requires expenses to be recognized in the same period as the related revenues, which means subtracting expenses from the related revenues to compute net income or net loss. This is in line with the matching principle, which ensures that expenses are matched with the revenues they helped to generate. Option A is incorrect because adding expenses and revenues together would not allow for accurate measurement of net income or net loss. Option B is incorrect because recognizing expenses of one period against cash revenues of another period violates the matching principle. Option C is incorrect as abandoning the matching principle would result in inaccurate financial statements.

Following the Expense Recognition Principle,to Recognize Expenses Along with the Related