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QUESTIONS The principle, also called the matching principle prescribes that a company record the expenses it incurred to generate the revenue reported Expense Recognition Revenue Recognition Full Disclosure Click Save and submit to save and submit Chok Save All Answers to see all answers, Sa Al Ans HR Type here to search o 2 DOLL US Р R. E S F G K B N М. Fn Alt Inspiron 15 3000

Answer 1

Answer: Option-(a): Expense Recognition Reason: Accounting is a process of identifiying, classifying, categorizing, recording, grouping and presenting the business transactions in an understandable manner in accordance with applicable statutory provisions of the land. In case of management accounting, the term accounting is not required to follow statutory provisions but must concentrate on yielding end-results as required by the management for various business or operational decision purpose. After recording business transactions in general journal, every journal entry shall be posted to respective general ledgers affected by such journal entry. For recording business transactions, basic accounting principles have been defined. One of those basic accounting principles is the "matching principle" which says that all expenses incurred to generate one reporting period's revenue shall be recorded in that period itself. It also says that only those costs and expenses that are to be incurred during the period for generating revenue shall be recorded in that period. Or else, it must be deferred to subsequent period. It is clear from above lines that expense recognition principle, also called as matching principle, prescribes that a company records all the expenses it incurred to generate the revenue reported. Option-(a) is the correct answer.