Question

Match the expense revenues with expenses recognition approaches with the most appropriate accounting event.

Cause-and-effect relationship
Cost of goods sold
Specific time period
Monthly salary payments to an office employee
Without regard to related revenue in the period incurred Advertising expenditures

Answer 1

Cause-and-effect relationship - Cost of goods sold

With the Cause and effect relationship, costs are linked to the revenue that they were incurred for to create. Cost of goods would therefore be linked to revenue.

Specific time period - Monthly salary payments to an office employee

Costs are to be recognized in the same period of time they were incurred. The monthly salary is to be paid monthly because it is incurred monthly.

Without regard to related revenue in the period incurred - Advertising expenditures

The advertising costs will be incurred when spent and not when the benefits are accrued.