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AHIP AHM-520 Exam - Topic 6 Question 129 Discussion

In the following paragraph, a sentence contains two pairs of words enclosed in parentheses. Determine which word in each pair correctly completes the statement. Then select the answer choice containing the two words that you have selected.The Igloo health plan recognizes the receipt of its premium income during the accounting period in which the income is earned, regardless of when cash changes hands. However, Igloo recognizes its expenses when it earns the revenues related to those expenses, regardless of when it receives cash for the revenues earned. This information indicates that the (realization/capitalization) principle governs Igloo's revenue recognition, whereas the (matching/initial-recording) principle governs its expense recognition.
A) realization / matching
B) realization / initial-recording
C) capitalization / matching
D) capitalization / initial-recording

AHIP AHM-520 Exam - Topic 6 Question 129 Discussion

Actual exam question for AHIP's AHM-520 exam
Question #: 129
Topic #: 6
[All AHM-520 Questions]

In the following paragraph, a sentence contains two pairs of words enclosed in parentheses. Determine which word in each pair correctly completes the statement. Then select the answer choice containing the two words that you have selected.

The Igloo health plan recognizes the receipt of its premium income during the accounting period in which the income is earned, regardless of when cash changes hands. However, Igloo recognizes its expenses when it earns the revenues related to those expenses, regardless of when it receives cash for the revenues earned. This information indicates that the (realization/capitalization) principle governs Igloo's revenue recognition, whereas the (matching/initial-recording) principle governs its expense recognition.

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Suggested Answer: A

by Jennie at Jun 29, 2026, 12:52 AM

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Yuette
3 days ago
I agree, A feels right. Revenue and expenses should align.
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Shawna
8 days ago
I think it's A. Realization and matching make sense together.
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Laura
13 days ago
I feel confident about A too. It aligns with standard practices.
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Jerrod
18 days ago
A is definitely the best choice. Clear principles in accounting.
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Sean
24 days ago
B doesn't fit well. Initial-recording isn't about expenses.
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Antione
29 days ago
I was leaning towards B) realization / initial-recording. But not sure.
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Isidra
1 month ago
I agree, A sounds right. Revenue earned first, then expenses.
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Junita
1 month ago
I think it's A) realization / matching. Makes sense to me.
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Marica
1 month ago
Just learned this, makes sense now!
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Kristofer
2 months ago
I thought it was capitalization for revenue recognition?
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Natalie
2 months ago
Wait, are we sure about the matching principle?
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Tyisha
2 months ago
Totally agree, that's how it works!
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Delsie
2 months ago
A) realization / matching is correct!
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Dean
2 months ago
I thought capitalization was more about asset recognition, but I'm not sure how it fits in this context. Maybe I should double-check my notes.
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Ruth
3 months ago
This question reminds me of a practice question we did on revenue recognition principles. I feel like realization and matching make the most sense here.
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Jutta
3 months ago
I'm a bit unsure about the second part; I remember something about matching expenses to revenues, but I'm not completely confident.
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Maryann
3 months ago
I think the realization principle is about recognizing income when it's earned, so I would go with option A.
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