Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 5 - No. 14)
The matching principle requires that:
Income should be matched with the expenses incurred in generating that income during the same period.
Expenses should be matched with the income earned in the same period.
Only income and expenses related to cash transactions should be matched.
The income should match the expenses.
Explanation
The matching principle requires that expenses should be matched with the income earned in the same period.
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