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3 . Accountants must be familiar with the concepts involved in determining earning of a business entity. The amount of earning reported for a business
Accountants must be familiar with the concepts involved in determining earning of a business entity. The amount of earning reported for a business entity is dependent on the proper recognition, in general, of revenues and expenses for a giving time period. In some situations, costs are recognized as expenses at the time of product sale. In other situations, guidelines have been developed for recognizing costs as expenses or losses by other criteria.
Explain the rationale for recognizing cost as expenses at the time of product sale.
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