Final answer:
The query is about a company's expired cost recognition during a period as an expense, which is a concept based on the accrual basis of accounting, involving matching expenses to the revenues they generate.
Step-by-step explanation:
A company recognizes the expired cost (expense) during the period and matches these expenses to the revenues they helped generate. This principle is part of the accrual basis of accounting, which states that revenue should be recognized when earned, regardless of when the cash is actually received, and expenses should be recognized when incurred, regardless of when they are paid.
This matching principle ensures a company's financial statements are accurate. For example, if a company pays for an insurance policy for the upcoming year, the cost of that insurance is an asset at first. As time passes and the insurance coverage is used, the cost is gradually recognized as an expense in the income statement over the period that the insurance applies, even if it was paid for in full at the beginning of the period.