The Expense Recognition Principle States That Expenses Have Future Benefit

question 147

True/False

The expense recognition principle states that expenses have future benefit to the company.

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Definitions:

Accounts Receivable

The money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Cash Management

The process of collecting, managing, and investing a company's cash flow efficiently.

Principles

Fundamental concepts or beliefs that drive decision-making processes and practices within various disciplines, including ethical values in business or foundational laws in science.

Days' Sales Uncollected

A financial metric indicating the average number of days it takes a company to collect payment after a sale is made.