Question

The primary objective of expense recognition is to Promote comparability between financial statements of different periods. Provide timely information to decision makers. Provide full disclosure. Record expenses in the period that related revenues are recognized.

Answer 1

Answer:

Record expenses in the period that related revenues are recognized.

Explanation:

Revenues are recognized when earned, not necessarily when cash is received.

According to the accrual basis accounting, transactions are recorded in the periods in which the event occur. Companies recognize revenues when they perform services or sell products (rather than when they recived cash). Expenses are recognized when incurred (rather than when paid).

This principal is in accordance with generally accepted accounting principles (GAAP).