Which of the following best describes the matching concept in accounting?
A)Revenues should be recorded in the same period as the expenses related to it are paid.
B)Revenue should be recorded in the same period as the cash is received.
C)Expenses should be recorded when paid.
D)Expenses should be recorded in the same period as the revenue they helped earn is recorded.

Question

Quizplus · Accepted Answer

The matching concept in accounting dictates that expenses should be recorded in the same period as the revenue they helped earn is recorded. This ensures that the income statement accurately reflects the matching of expenses incurred in generating revenue. Option A is incorrect because expenses may be paid in one period but may relate to revenue earned in a future period. Option B is incorrect because revenue may be earned in one period but may be received in a future period. Option C is incorrect because expenses may be incurred in one period but may be paid in a future period.

Which of the Following Best Describes the Matching Concept in Accounting