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:

Minimize Losses

Strategies or actions taken to reduce the amount of money or resources wasted or not gained in operations or transactions.

Pure Monopolist

An entity that is the sole provider of a particular product or service, facing no competition in its market.

Economic Profits

Profits exceeding the total costs of production, including both explicit and implicit costs, representing gains above what could be earned in the next best alternative use of resources.