The Matching Principle Requires That Expenses Be Recognized

question 67

Multiple Choice

The matching principle requires that expenses be recognized

• A)in the same period in which all the assets are used up.
• B)in the same period in which the revenue generated by these expenses is recognized.
• C)when the costs are paid by the entity.
• D)in the same period in which the revenue generated by these expenses is receiveD.

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Definitions:

Market Value

The going rate for buying or selling a service or asset.

March Put

A put option contract with a expiration date in March, allowing the holder to sell an asset at a pre-specified price.

Call Option

A financial contract giving the buyer the right, but not the obligation, to purchase a stock, commodity, or other asset at a specified price within a specified time.

Exercise Price

The predetermined price at which the holder of an option can buy (call) or sell (put) the underlying security or commodity.