Question

The basic principle involved with expense recognition is:________. A. The business will continue to operate indefinitely unless there is evidence to the contrary.B. All transactions are recorded at the exchange price.C. The business is separate from its owners. D. All costs that are used to generate revenue are recorded in the period the revenue is recognized.

Answer 1

All transactions are recorded at the exchange price.

Answer: Option B.

Explanation:

The expense recognition principle is savvy to utilize the cost acknowledgment standard as it improves the general nature of your financial reports. The best possible acknowledgment of cost and income gives an increasingly exact diagram of results from tasks and evades perhaps misquoting benefit or misfortune inside a specific period.

It is a center component of the gathering premise of bookkeeping, which holds that incomes are perceived when earned and costs when devoured. On the off chance that a business were to rather perceive costs when it pays providers, this is known as the money premise of bookkeeping.