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ASSOCIATING CAUSE AND EFFECT : many costs are linked to the revenue they help produce, for examples, a sales commission owed to an employee is based on the amount of a sale. therefore, commission expense should be recorded in the same accounting period as the sale... these costs are recognized immediately Explanation: sana makatulong salamat#SKEPTRON correct me if I'm wrong 70. c. Depreciationb. Sales commissiond. Officers’ salaries Uploaded by: samirtiblani1996 Step-by-step answerlesacinia pulvi entesque dapibus efficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices ac magna. Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. Donec aliquet. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices ac magna. Fusce dui lectus, congue vel laoreet ac, dictum ur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices ac magna. Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. Donec aliquet. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur laoreet. Nam risus ante, Subscribe to view the full answerWhy Join Course Hero?Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.
Expense recognition will typically follow one of three approaches, depending on the nature of the cost:
Payment vs. RecognitionIt is important to note that receiving or making payments are not criteria for initial revenue or expense recognition. Revenues are recognized at the point of sale, whether that sale is for cash or a receivable. Expenses are based on one of the approaches just described, no matter when payment occurs. Recall the earlier definitions of revenue and expense, noting that they contemplate something more than simply reflecting cash receipts and payments. Much business activity is conducted on credit, and severe misrepresentations of income could result if the focus was simply on cash flow. Need help preparing for an exam?Check out ExamCram the exam preparation tool!
Principlesofaccounting.com ™ Copyright © 2022. All rights reserved. What is an example of expense recognition?Example of the Expense Recognition Principle
A business pays $100,000 for merchandise, which it sells in the following month for $150,000. Under the expense recognition principle, the $100,000 cost should not be recognized as expense until the following month, when the related revenue is also recognized.
What is the expense recognition principle?The expense recognition principle is a fundamental principle of accounting that business expenses should be recognized in the same period as the revenues associated with those expenses (and vice versa). This is also called the matching principle and is the most basic tenet of accrual accounting.
What is the expense recognition principle quizlet?Expense Recognition Principle. Match expenses with revenues in the period when the company makes efforts to generate those revenues. Revenue and Expense Recognition. in accordance with generally accepted accounting principles (GAAP)
Which of the following should be expensed under the principle of systematic and rational allocation?Option a is the correct answer.
Salesperson's salary must be expensed every month.
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