If there are no current assets or liabilities associated with operating expenses,the amounts we report for these expenses in the income statement must equal the amount of cash we paid for these items.

Question

Quizplus · Accepted Answer

Operating expenses are recorded when they are incurred and paid for in cash. If there are no current assets or liabilities associated with these expenses, then the entire amount is recognized as an expense in the income statement, and the amount of cash paid for these items would be the same as the reported operating expenses. Therefore, the statement is true.

If There Are No Current Assets or Liabilities Associated with Operating