Question

Explain the expense principle.

Answer 1

Answer:

• The expense recognition principle states that expenses should be recognized in the same period as the revenues to which they relate. If this were not the case, expenses would likely be recognized as incurred, which might predate or follow the period in which the related amount of revenue is recognized .

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Answer 2

$\huge \mathfrak{bonjour}$

The expense principle states that expenses are recognised when the assets or services are used to produce revenue and not when the cash is paid. In other words expenses should be recognised whenever uncurred irrespective of whether cash is paid or not.

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