Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 44 - No. 34)
What does the matching principle dictate?
To ensure all income earned is recognized within the period regardless of when received.
To ensure all expenses are recognized when incurred, regardless of when paid.
To match revenue to the period when cash is received.
To match expenses to the period when cash is paid.
Explanation
The matching principle requires recognizing expenses in the same period as the revenue they helped generate, regardless of when cash changes hands.
Comments (0)
