Under the Expense Recognition Principle

question 67

Multiple Choice

Under the expense recognition principle:

• A) expenses are the costs of assets used up in earning revenue.
• B) expenses cannot be recognized when a liability is created in earning revenue.
• C) expenses have a future benefit to the company.
• D) expenses are recognized at the same time services are recorded.

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Definitions:

Injunction

A judicial order that restrains a party from beginning or continuing an action threatening or invading the legal right of another.

Legal Position

The specific rights, duties, or standpoints held or taken in a legal action or argument.

Compensation

Payment or remuneration given to someone in exchange for loss, damage, or suffering.

Partial Performance

Completion of only part of the obligations specified in a contract, which may affect the enforceability or terms of the contract.