Question

What is the expense recognition principle?

Answer 1

Revenue recognition is a generally accepted accounting principle (GAAP) that determines the specific conditions in which revenue is recognized or accounted for. Generally, revenue is recognized only when a critical event has occurred, and the amount of revenue is measurable. However, there are several situations in which exceptions may apply.

Answer 2

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, expenseswould likely be recognized as incurred, which might predate or follow the period in which the related amount of revenue isrecognized