The matching principle states that expenses should be matched with revenues because
A) assets should be matched with liabilities.
B) dividends should be matched with shareholder investments.
C) cash payments should be matched with cash receipts.
D) efforts should be matched with accomplishments.

Question

Quizplus · Accepted Answer

The matching principle states that expenses should be matched with revenues because it is the most appropriate way to measure a company's profitability. This principle allows for a fair representation of the expenses incurred in generating revenue, by recognizing the effort put into generating that revenue, and ensuring that expenses related to those efforts are matched with the corresponding revenues.

The Matching Principle States That Expenses Should Be Matched with Revenues