Which of These Is Considered to Be the 'Ideal' Way

question 23

Multiple Choice

Which of these is considered to be the 'ideal' way to match expenses?

• A)Allocation of costs
• B)Cause and effect
• C)Immediate recognition
• D)All of the above are equally 'ideal' depending upon the circumstances

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Definitions:

Deferred Revenue

Income received by a company for goods or services yet to be delivered or performed, recognized as a liability on the balance sheet.

Utilities Expense

Utilities expense refers to the cost incurred by a business for the consumption of utility services such as electricity, water, and gas.

Accounts Payable

Liabilities or amounts owed by a company to creditors for goods and services that have been purchased on credit but not yet paid for.

Journal

A chronological record where financial transactions are initially recorded using the double-entry accounting system before being transferred to accounts in the ledger.