The concept referred to by the matching principle is that
A) current liabilities have the same period of existence as the current assets.
B) all cash disbursements for a period be matched to cash receipts for the period.
C) net income should be reported on a quarterly basis.
D) where possible the expenses to be included in the income statement were incurred to produce the revenues.

Question

Quizplus · Accepted Answer

The matching principle in accounting states that expenses should be recorded during the period in which they are incurred, regardless of when the transfer of cash occurs. This principle is fundamental in accrual accounting and ensures that the income statement reflects the expenses related to the revenue earned in the same period, thereby providing a more accurate picture of a company's financial performance.

The Concept Referred to by the Matching Principle Is That