Asked by Maame Ocran on May 12, 2024
Verified
Revenues and expenses should be recorded in the same period to which they relate.
Recorded
The process of documenting financial transactions in the books of accounts as evidence of the transactions.
Relate
To establish a connection or relationship between two or more things.
- Understand the basis of revenue recognition and the matching principle as critical foundations of accrual accounting.
Verified Answer
AR
Analiz RiveraMay 15, 2024
Final Answer :
True
Explanation :
This is the matching principle of accounting which states that revenues should be recognized when earned and expenses should be recognized when incurred, regardless of when the cash is actually received or paid. This ensures accurate financial reporting and reflects the true financial position of the entity.
Learning Objectives
- Understand the basis of revenue recognition and the matching principle as critical foundations of accrual accounting.
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