Which one of the following statements regarding the Revenue Recognition Principl

Question

Which one of the following statements regarding the Revenue Recognition Principle and Expense Recognition (Matching) Principle is true? Answer According to the revenue principle, a company should not record the revenue from a transaction until it is actually received in cash. Expenses are recorded when the company uses goods or services. The Expense Recognition (Matching) principle requires that expenses be determined first and then revenues be "matched" to those expenses. The revenue and expense accounts on the income statement continue to have an impact beyond the current period, whereas balance sheet items report the financial impact in just the current period. Which one of the following statements regarding the Revenue Recognition Principle and Expense Recognition (Matching) Principle is true? Which one of the following statements regarding the Revenue Recognition Principle and Expense Recognition (Matching) Principle is true? According to the revenue principle, a company should not record the revenue from a transaction until it is actually received in cash. Expenses are recorded when the company uses goods or services. The Expense Recognition (Matching) principle requires that expenses be determined first and then revenues be "matched" to those expenses. The revenue and expense accounts on the income statement continue to have an impact beyond the current period, whereas balance sheet items report the financial impact in just the current period. According to the revenue principle, a company should not record the revenue from a transaction until it is actually received in cash. Expenses are recorded when the company uses goods or services. The Expense Recognition (Matching) principle requires that expenses be determined first and then revenues be "matched" to those expenses. The revenue and expense accounts on the income statement continue to have an impact beyond the current period, whereas balance sheet items report the financial impact in just the current period.

Explanation / Answer

The revenue and expense accounts on the income statement continue to have an impact beyond the current period, whereas balance sheet items report the financial impact in just the current period.

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