The revenue recognition principle and the expense recognition principle require that the company recognize related revenue and expense transactions in the same accounting period. Discuss why this matching concept is important and explain how the financial information would be misleading if the accountant did not follow these rules. Provide examples in your discussion to demonstrate your point(s).
The revenue recognition principle and the expense recognition principle require that the company recognize related revenue and expense transactions in the same accounting period.
Discuss why this matching concept is important and explain how the financial information would be misleading if the accountant did not follow these rules. Provide examples in your discussion to demonstrate your point(s).
Revenue Recognition
It is important for the business entity to recognize the revenue and its associated expenses which are beneficial for preparing the qualitative financial report in this regard as well. It is important to realize the performance obligation which are involved in the contract or agreement which determine the recognition of revenue and expenses in this part as well. Here below given the details related to this as well.
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