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CPA practice questions and answers

Larry, who uses the accrual basis of accounting, hired an extra driver to help him make deliveries in December. The extra driver only works from December 1st through the 31st . Larry pays the driver on January 5th, but the expense is shown on the December income statement. Why? Mark one answer:

(A)Cost benefit analysis

(B)Matching principle

(C)Cost principle

(D)Going concern principle

(E)Gross profit margin analysis

The Correct Answer
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