The matching rule precludes the cost of inventory from being expensed until the inventory has been sold.

Question

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The matching rule, also known as the matching principle, requires that expenses be matched with the revenues they helped generate in the same accounting period. This means that the cost of inventory should be expensed (recognized as cost of goods sold) when the inventory is sold and the corresponding revenue is recognized.

The Matching Rule Precludes the Cost of Inventory from Being