Expenses cannot be estimated on income statements.

Question

Quizplus · Accepted Answer

False. Expenses can be estimated on income statements.
Key Takeaway: Expenses can be estimated-and often must be-and these estimates appear on income statements. The reason an expense would be estimated is the matching principle, in which an expense should occur in the same month as the revenue. So a utility bill can be estimated at month end as a utility payable if the bill has not yet been received.

Expenses Cannot Be Estimated on Income Statements