There are some liabilities, such as income taxes payable and the estimated warranty liability, for which the amounts must be estimated so they can be recorded in the same period as the related revenues. Failure to record these amounts in the same period as the related revenues is a violation of the
A)concept of historical cost.
B)going concern assumption.
C)limitation of materiality.
D)expense recognition principle.

Question

Quizplus · Accepted Answer

This scenario refers to the principle of expense recognition, also known as the matching principle. This principle requires that expenses be recognized in the same period as the related revenues to accurately reflect the financial performance of a company. Failing to record the estimated liabilities in the same period as the related revenues would result in a violation of this principle.

There Are Some Liabilities, Such as Income Taxes Payable and the Estimated