reliability principle

Definition

An accounting method which only allows expenses to be recorded for which there is verifiable proof, such as a receipt or invoice prepared by a third party. This concept does not work with certain entries such as those pertaining to the obsolescence of inventory.

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You should try and use the reliability principle if you think that will make things easier for your company in the future.

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The accounting method called reliability principle was meant to make sure that there was proof of expenses and that was interesting.

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Since they were using the reliability principle method, they required the borrower to provide proof of the expenses before they would book them.

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