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:

Price Change

A variation in the cost of goods or services over time, which can be influenced by factors such as supply and demand.

Midpoint Method

A technique for calculating the percentage change in a variable, which averages the initial and final values to compute elasticity.

Price Elasticity

A measure of how responsive the quantity demanded of a good is to a change in its price, indicating how shifts in price can affect consumer demand and consumption.

Midpoint Method

A technique used in economics for calculating the percentage change between two values by dividing the change by the average of the initial and final values.