The Expense Recognition Principle States That Expenses Should Be Matched

question 193

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:

Maximizing Law

A principle suggesting that individuals behave in ways that they believe will maximize their rewards and minimize their losses.

Matching Law

A principle in psychology and behavioral economics that states the proportion of responses directed towards an option matches the proportion of reinforcements obtained from that option.

Prefrontal Cortex

The prefrontal cortex is a part of the brain located at the front of the frontal lobes; it is involved in complex behaviors including planning, decision making, and moderating social behavior.

Parietal Lobe

A region of the brain located at the upper back area in the skull, crucial for processing sensory information and spatial navigation.