The Expense Recognition Principle,also Called the Matching Principle

question 85

Multiple Choice

The expense recognition principle,also called the matching principle:

• A)Prescribes that accounting information is based on actual cost.
• B)Provides guidance on when a company must recognize revenue.
• C)Prescribes that a company report the details behind financial statements that would impact users' decisions.
• D)Prescribes that a company record the expenses it incurred to generate the revenue reported.
• E)Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

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Definitions:

Industrial

Pertaining to industry or manufacturing, characterized by the mass production of goods and the extensive use of machinery and factories.

Division Of Labor

The allocation of different tasks or jobs to different people or groups, typically to improve efficiency and productivity.

Postindustrial Societies

Societies characterized by an economy dominated by services and information processing rather than the production of goods.

Capitalist Market Theory

An economic theory emphasizing private ownership of production means, creating goods and services for profit in competitive markets.