The Expense Recognition Principle Includes Two Steps

question 49

Multiple Choice

The expense recognition principle includes two steps:

• A) measure the expenses and record the revenue.
• B) identify all the expenses incurred during the accounting period and measure the expenses and match them against the revenue earned.
• C) when to record revenue and the amount of revenue to record.
• D) when to record the revenue and identify all the expenses incurred during the accounting period.

---

Definitions:

Equity Mutual Fund

A type of mutual fund that primarily invests in stocks, aiming to provide returns through dividends and capital gains.

Rate of Return

A measure of the gain or loss on an investment over a specified time period, expressed as a percentage of the investment's cost.

Holding Period

The duration of time an investment is held before being sold, which can affect the rate of return and tax implications.

Base Monthly Salary

The initial rate of compensation provided to an employee, excluding additional earnings such as bonuses, overtime, or commissions.