PRC-1 · Chapter 1 · Question 56 of 100
Which accounting principle strictly dictates that a business must record an expense in the period it is incurred, regardless of when the cash is actually paid?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Matching (Accrual) concept
Explanation
The matching or accrual concept requires that expenses related to revenue generation be reported in the same period the revenue is recognized, irrespective of cash flow.
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