The Broad Principle That Requires Expenses to Be Reported in the Same

question 175

Multiple Choice

The broad principle that requires expenses to be reported in the same period as therevenues that were earned as a result of the expenses is the:

• A)Matching principle.
• B)Timeliness principle.
• C)Cash basis of accounting.
• D)Cost principle.
• E)Revenue recognition principle.

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Definitions:

Capital

Financial assets or the financial value of assets, such as funds held in deposit accounts, as well as the physical factors of production including machinery and buildings.

Character

In finance, character often refers to one of the "Three Cs" (character, capacity, collateral) used to assess a borrower's creditworthiness, focusing on their reputation for repaying debts.

Financial Reserves

Funds or assets that are set aside to meet future liabilities, contingencies, or unforeseen expenditures.

Capital

Resources made available for the use in the production of goods or services, often categorized into financial, human, or physical forms.