Agreements associated with acquiring the resources it needs to do business obligate the company to pay cash or provide goods or services in exchange for the benefits received.Applying these rules to the process to record expenses,companies should recognize an expense when
A)they have developed an economic benefit in the process of acquiring funds,goods or services needed to operate a business
B)they have consumed an economic benefit in the process of distributing funds,goods or services needed to operate a business
C)they have consumed an economic benefit in the process of acquiring funds,goods or services needed to operate a business
D)they have developed an economic benefit in the process of distributing funds,goods or services needed to operate a business

Question

Quizplus · Accepted Answer

Companies should recognize an expense when they have consumed an economic benefit in the process of acquiring funds, goods, or services needed to operate a business. This is because expenses are recognized when the related benefits are consumed or used up in the process of generating revenues.

Agreements Associated with Acquiring the Resources It Needs to Do