What principle dictates that expenses should be recorded in the same period as associated revenues?

The principle that dictates that expenses should be recorded in the same period as associated revenues is the Matching Principle. This accounting principle ensures that all costs incurred in generating revenue are recognized in the same reporting period. By aligning expenses with the revenues they help produce, the financial statements provide a clearer picture of a company's profitability and performance for that given period.

In practice, this means that when a company recognizes revenue from sales, it also needs to recognize the costs directly associated with those sales during the same period. For example, if a business sells a product in January, it should also record the cost of producing that product in January, even if the costs were incurred in an earlier month. This alignment is crucial for accurately assessing operational efficiency and for stakeholders who rely on the financial statements for decision-making.

Other principles listed do not serve the same purpose. The Conservatism Principle focuses on recognizing potential losses and liabilities prudently, while the Historical Cost Principle emphasizes recording assets at their original purchase prices. The Revenue Recognition Principle addresses when revenue should be recognized, which, while related, does not specifically account for the timing of associated expenses like the Matching Principle does.