Accounting for IGCSE & O level - Advanced Principles (Section 5 - No. 9)
What does the 'matching principle' directly relate to when determining the profit of a business?
The price of the goods sold
The expenses incurred to generate those sales
The company's overall cash flow
The total assets of the company
Paliwanag
The matching principle requires expenses be matched against related revenues to determine a company's profit.