The matching principle:
A)Applies only to situations in which a cash payment occurs before an expense is recognized.
B)Applies only to situations in which a cash receipt occurs before revenue is recognized.
C)Is used in accrual accounting to determine the proper period in which to recognize revenue.
D)Is used in accrual accounting to determine the proper period for recognition of expenses.

Question

Quizplus · Accepted Answer

The matching principle is a fundamental accounting concept that is used to determine the proper period for recognition of expenses. It states that expenses should be recognized in the same period as the revenues they helped generate. This is important for accurately reflecting the financial performance of a business and adhering to the accrual basis of accounting.

The Matching Principle