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On 15 March a business receives an invoice for electricity used in February and pays it on 1 April. Using accrual accounting, in which month is the expense recognised?

  1. A March
  2. B April
  3. C February
  4. D No entry is required
Answer

February

The matching principle records the expense in the period the benefit was consumed, which is February, regardless of when the invoice arrives or is paid.

All Accounting MCQs

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