Final answer:
Under accrual-basis accounting, companies report expenses in the same period as the revenue they help to generate, adhering to the matching principle.
Step-by-step explanation:
Under accrual-basis accounting, companies typically report expenses in the same period as the revenue they help to generate. This approach reflects the matching principle, which requires that expenses be matched to the revenues they help create, irrespective of when the cash transactions actually occur. This principle provides a more accurate picture of a company's financial performance for a given period. For example, if a company incurs expenses for manufacturing in one month but sells the manufactured goods in the following month, the expenses would be reported in the month the products are sold. This ensures that the expenses are matched with the revenues from the sales of those goods.
Under accrual-basis accounting, companies typically report expenses in the same period as the revenue they help to generate. Accrual accounting recognizes revenue when it is earned and expenses when they are incurred, regardless of when cash is received or paid. This method allows for a more accurate representation of a company's financial performance by matching expenses to the revenue they contribute to.