Expense Recognition is an accounting principle that dictates when expenses should be recorded in financial statements. According to this principle, expenses are recognized in the same period as the revenues they help generate, ensuring that financial reports accurately reflect a company's performance. This approach aligns with the matching principle, which aims to match expenses with the revenues they produce. For example, if a company incurs costs to produce a product, those expenses should be recorded in the same period when the product is sold, providing a clearer picture of profitability.