The Expense Recognition Principle Refers to

question 157

Multiple Choice

The expense recognition principle refers to

• A)Recognizing revenue in the period when it is earned.
• B)Matching the revenue reported on the income statement with the receivable reported on the statement of financial position.
• C)Letting expenses follow revenues.
• D)Dividing the life of the business into artificial time periods.

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Definitions:

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account columns to check the accuracy of financial recordings.

Journal Entries

Records of financial transactions entered into an accounting system, ensuring that the debits equal the credits in financial accounting records.

Cash

Liquid assets held by an individual or company, which include currency and demand deposits readily available for transactions.

Debits Than Credits

Debits than credits refers to a situation where the total debits in an account or transaction exceed the total credits, impacting the balance.