The objective of matching revenues and expenses to specific fiscal periods is most nearly attained when revenues and expenses are recognized in the period during which cash related to the transactions is received or paid.

Question

Quizplus · Accepted Answer

The objective of matching revenues and expenses to specific fiscal periods is not necessarily attained when revenues and expenses are recognized in the period during which cash related to the transactions is received or paid. This is because there may be timing differences between when cash is received or paid and when revenue and expenses are actually earned or incurred. To achieve the objective of matching, accrual accounting recognizes revenue when it is earned and expenses when they are incurred, regardless of when cash is received or paid.

The Objective of Matching Revenues and Expenses to Specific Fiscal