Answer:
The answer is Provides guidance on when a company must recognize revenue.
Explanation:
Recognition principle requires that revenues be shown on the income statement in the period in which they are earned.
Answer:
The correct answer is letter "D": Prescribes that a company record the expenses it incurred to generate the revenue reported.
Explanation:
The expense recognition principle, also called the marching principle, is a reporting guideline stating that a company must record revenues when they are earned and expenses when they are consumed. This is based on the accrual basis accounting approach. When expenses are recognized when paid, the cash basis of accounting is used.
