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Title: Textbook Solutions Manuals - Modern Principles of Cost Accounting
Accurate data you to take more relevant decision-making with organizational efficiency. Principles of Cost Accounting Solutions Manual helps you check all the boxes!
By: Crazy For Study
Types of Cost Accounting Principles
The Revenue Principle
The revenue principle states that any organization's revenue should be recorded and recognized at the point of sale. Most of them wait for consumers to make a cash payment to recognize the revenue formally. All sales made must be recorded at the buyer moment to gain legal possession of the commodity or avail of the service. This principle is sometimes called the "revenue recognition principle."
The Expense Principle
The Expense principle is quite similar to the revenue ones. The business expenses should also be recorded in books the moment they are incurred. In the situation you accept any goods or services from another entity, the expense should formally be recorded. It means that when business expenses occur and goods are received, or the service is performed, their expenses are recorded. for more details check with https://www.crazyforstudy.com/
The matching principle
The Matching Principle says that you need to match each revenue item with an item of expense. For instance, if you are selling chips in the market, you should count the expenses of all raw materials like potato, oils, spices, and others when consumers buy them. In other words, you must match the expenses of the ingredients with the revenue earned from the sale of chips packet. When an organization applies the revenue, expense, and matching principles in practice, they are operating under the accrual accounting method.
The objectivity principles of cost accounting say that verifiable and factual data should only be entered in the accounting software. There should be no entry of estimations or subjective costs, and you should never opt for this practice even if sounds better for you.
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