Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 13 - No. 45)

Which of the following best describes the 'matching principle' in accounting?

Expenses are recognized when cash is paid.

Revenues are recognized when cash is received.

Expenses are matched with the revenues they help generate.

Assets are matched with liabilities.

The matching principle states that expenses should be recorded in the same accounting period as the revenues they helped generate.