Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 28 - No. 28)

What does the 'matching principle' dictate in accounting?

Expenses should be recorded in the period in which they are incurred.

Revenues should be recognized when earned.

Expenses should be matched with the revenues they help generate.

Revenues should be recognized only when cash is received.

The matching principle is about aligning expenses with the revenues they help generate to provide a more accurate view of a company's performance.