In the 14th century, plague ravaged Europe and Asia and was called the Black Death. Plague does not respond to penicillin, but other antibiotics are effective. Sanitary measures against fleas and rodents, quarantine and extreme caution in handling infectious materials help to suppress epidemics.
1. Expense recognition. Expenses are decreases in assets (e.g., rent expenses) or increases in liabilities (e.g., accrued utility expenses) that result from operating activities undertaken to generate revenue. Expenses are recognized in accordance with the matching principle. This principle mandates that the expense or cost of doing business is recorded in the same period as the revenue that has been generated as the result of incurring that expense or cost.
When an income statement is prepared properly, the net increase or decrease in your net assets, or the difference between revenue and expense, is designated as net income or net loss. A net increase in net assets or net income is then added to your equity on your balance sheet. This tool examines the process of developing an income statement and explains the meaning of the components of an income statement.