Which Accounting Principle Requires That the Expense Associated with Compensated

question 56

Multiple Choice

Which accounting principle requires that the expense associated with compensated absences be accounted for in the period in which it is earned by the employee?

• A) Revenue recognition principle
• B) Expense recognition principle
• C) Matching principle
• D) Economic entity principle

---

Definitions:

Process Further

The continuation of operations on goods or information to add more value before final output or completion.

Profit Difference

The change in profit resulting from differences in sales, costs, or other financial factors between two periods.

Activity-Based Costing

A costing method that assigns costs to products or services based on the activities required to produce them, aiming to provide more accurate product costing.

Relevant Cost Decision Model

A decision-making tool that focuses on the costs directly related to a specific business decision, ignoring sunk costs and irrelevant expenses.