The Expense Recognition Principle States That Expenses Should Be Matched

question 172

Multiple Choice

The expense recognition principle states that expenses should be matched with revenues.Another way of stating the principle is to say that:

• A)assets should be matched with liabilities.
• B)efforts should be matched with accomplishments.
• C)dividends should be matched with stockholder investments.
• D)cash payments should be matched with cash receipts.

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Definitions:

Flotation Costs

The costs incurred by a company when it issues new securities, including fees for underwriting, legal advice, and registration.

Definition

A statement expressing the essential nature of something or a clear explanation of the meaning of a word or phrase.