The Accounting Principle of Expense Recognition Is Best Demonstrated by

question 122

Multiple Choice

The accounting principle of expense recognition is best demonstrated by

• A) not recognizing any expense unless some revenue is realized.
• B) associating effort (expense) with accomplishment (revenue).
• C) recognizing prepaid rent received as revenue.
• D) establishing an Appropriation for Contingencies account.

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Definitions:

Efficiency Argument

The principle that resources should be allocated in a way that maximizes the productivity or welfare of a community or economy.

Jobs Argument

A perspective or argument centered on the impacts of economic policies or business decisions on employment levels.

Infant-Industry

An economic rationale for trade protectionism arguing that new industries need to be shielded from international competition to allow them to grow and become competitive.

Infant-Industry Argument

The justification for protective tariffs to shield emerging domestic industries from international competition until they become competitive.