Intuit Bookkeeping Professional Certificate Practice Exam

Recognizing expenses in bookkeeping is typically determined by the accrual accounting method, which states that expenses should be recorded when they are incurred, not necessarily when cash is paid. In this scenario, if Printing Pros hired the employee in April, they would recognize the expense in that month when the obligation to pay the employee was established, despite the employee receiving their first paycheck in May. This approach adheres to the matching principle that aligns expenses with the period in which the related services are received.

Therefore, recognizing the expense in April accurately reflects the timing of when the business incurred the cost associated with hiring that employee, even though the actual payment occurred later. This method ensures that the financial statements accurately depict the company’s financial situation during the relevant accounting periods.