The revenue recognition principle states that:
a. revenue should be recognized in the accounting period in
which a performance obligation is satisfied.
b. expenses should be matched with revenues.
c. the economic life of a business can be divided into artificial
time periods.
d. the fi scal year should correspond with the calendar year.
2. (LO 1) The time period assumption states that:
a. companies must wait until the calendar year is completed to
prepare financial statements.
b. companies use the fi scalyear to report financial information.
c. the economic life of a business can be divided into artificial
time periods.
d. companies record information in the time period in which the
events occur.
