Reading 32: Understanding the Income Statement - LOS c ～ Q1 recognized, generated, following, services, revenue

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1.When the cost of goods and services used are recognized as an expense in the same period that its generated revenue is recognized, which of the following principle(s) is/are being described?

A)   The matching principle for revenue and expense recognition.

B)   The accrual and expense recognition principles.

C)   The depreciation and accrual principles.

D)   The matching and accrual principles.

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答案和详解如下：

1.When the cost of goods and services used are recognized as an expense in the same period that its generated revenue is recognized, which of the following principle(s) is/are being described?

A)   The matching principle for revenue and expense recognition.

B)   The accrual and expense recognition principles.

C)   The depreciation and accrual principles.

D)   The matching and accrual principles.

The correct answer was A)

The accrual concept states that revenue is recognized when the earnings process is completed and cash receipt is assured.