Final answer:
The three types of expense recognition principles in accounting are immediate recognition, matching principle, and systematic allocation.
Step-by-step explanation:
The three types of expense recognition principles in accounting are:
- Immediate Recognition: This principle recognizes expenses as they are incurred, without any delay. An example of immediate recognition is the recognition of utility expenses in the month they are used.
- Matching Principle: This principle matches expenses with the revenues they help generate. For example, if a company sells a product in February but incurs advertising expenses in March to promote that product, the expenses are recognized in February to match them with the related revenue.
- Systematic Allocation: This principle allocates expenses over a specific period. For instance, if a company purchases a long-term asset like a building, the costs are systematically allocated over its estimated useful life through a process called depreciation.