Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 47 - No. 21)
Which of the following statements is true regarding the matching principle?
It matches revenues with assets.
It matches expenses with cash flows.
It matches expenses with the revenues they help generate.
It matches assets with liabilities.
Explanation
The matching principle is a central concept in accrual accounting. It states that expenses must be recognized in the same period as the revenues they helped generate.
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