Question

An expenditure that benefits the year in which it is made should be deducted from revenue in the same year.

a) True
b) False

Answer 1

An expenditure that benefits the year in which it is made should be deducted from revenue in the same year.

Step-by-step explanation:

The statement 'An expenditure that benefits the year in which it is made should be deducted from revenue in the same year' is True.

This concept is based on the accrual accounting method. According to accrual accounting, revenues and expenses are recorded when they are earned or incurred, regardless of when the cash is received or paid. Therefore, if an expenditure benefits the year in which it is made, it should be deducted from the revenue in the same year.