The expense recognition principle, also called the matching principle: Multiple Choice Provides guidance on when a company must recognize revenue. Prescribes that a company report the details behind financial statements that would impact users' decisions. Prescribes that accounting information is based on actual cost. Prescribes that a company record the expenses it incurred to generate the revenue reported. Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

Question

Business

Jaylen Cooley

24 June, 16:47

The expense recognition principle, also called the matching principle: Multiple Choice Provides guidance on when a company must recognize revenue. Prescribes that a company report the details behind financial statements that would impact users' decisions. Prescribes that accounting information is based on actual cost. Prescribes that a company record the expenses it incurred to generate the revenue reported. Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

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Answers (2)

Know the Answer?

Kaylah Cox · Answer 1

The answer is Provides guidance on when a company must recognize revenue.

Explanation:

Recognition principle requires that revenues be shown on the income statement in the period in which they are earned.

Gunner Tyler · Answer 2

The correct answer is letter "D": Prescribes that a company record the expenses it incurred to generate the revenue reported.

Explanation:

The expense recognition principle, also called the marching principle, is a reporting guideline stating that a company must record revenues when they are earned and expenses when they are consumed. This is based on the accrual basis accounting approach. When expenses are recognized when paid, the cash basis of accounting is used.