The broad principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses is the:
A) Expense recognition (Matching) principle.
B) Recognition principle.
C) Cost principle.
D) Time period principle.
E) Cash basis of accounting.

Question

Quizplus · Accepted Answer

The Expense recognition (Matching) principle requires that expenses be recognized (recorded) in the same period in which the corresponding revenues are earned. This principle ensures that financial statements accurately reflect the matching of expenses with the revenues they generate, which is essential for determining a company's profitability.

The Broad Principle That Requires Expenses to Be Reported in the Same