Which of the following illustrates the matching principle?
A)Expensing the cost of an item sold at the same as the revenue is recognized.
B)Expensing a fixed asset when purchased.
C)Expensing a fixed asset at the end of its useful life.
D)Waiting until the cash is collected before recognizing revenue.

Question

Quizplus · Accepted Answer

The matching principle requires that expenses be recognized in the same period as the revenue they help generate. Expensing the cost of an item sold at the same time as the revenue is recognized illustrates this principle.

Which of the Following Illustrates the Matching Principle