The Expense Recognition Principle States That Expenses Should Be Matched

question 16

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) owner withdrawals should be matched with owner contributions.
• D) cash payments should be matched with cash receipts.

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Definitions:

Gross Margin Ratio

A financial metric that shows the proportion of revenue that exceeds the cost of goods sold, indicating the efficiency of production and sales.