Because Contract Workers' Labor Cost Is Unknown and Their Service

question 45

True/False

Because contract workers' labor cost is unknown and their service is usually poor as compared to full-time employees, organizations prefer not to use them.

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Definitions:

Recognizes Revenues

The process of recording revenue in the financial statements when it is earned and realizable, in accordance with the revenue recognition principle.

Expense Recognition Principle

Accounting principle that dictates expenses should be recognized in the period in which they are incurred to generate revenues.

Accounting Period

This is a specific duration of time for which financial statements are prepared to understand and evaluate a company's financial performance.

Earned

Refers to income or revenue that a company has generated from its operations or business activities.