Asked by Mercy’s World on Apr 24, 2024
Verified
Expenses are recorded when
A) cash is paid for services rendered
B) a bill is received in advance of services rendered
C) assets are used in the process of earning revenue
D) assets are purchased
Expenses
Expenses are the outflows or the utilization of assets or incurring of liabilities during a period in the course of generating revenue.
Cash
A liquid asset representing currency or its equivalents that can be used immediately in transactions without any conversion or delay.
Services Rendered
The provision of work performed by one party for another in exchange for compensation.
- Master the concepts of recording and reporting business operations and their repercussions on financial statements.
Verified Answer
AA
Arsalan Ahmed6 days ago
Final Answer :
C
Explanation :
Expenses are recorded when assets are used in the process of earning revenue, according to the matching principle of accounting. This principle states that expenses should be matched with the revenues they help to generate, regardless of when cash transactions occur.
Learning Objectives
- Master the concepts of recording and reporting business operations and their repercussions on financial statements.