When there is no direct connection between revenues and expenses,the costs are systematically allocated among the periods benefited.

Question

Quizplus · Accepted Answer

This statement is referring to the matching principle of accounting, which requires that expenses be recognized in the same period as the revenues they help to generate, even if there is no direct cause-and-effect relationship. If expenses cannot be directly matched to a specific revenue-generating activity or period, they are allocated or apportioned among the periods that benefit from them.

When There Is No Direct Connection Between Revenues and Expenses,the