The accounting principle that ensures that all expenses are recorded when they are incurred during the period, and compares those expenses against the revenues of the period is called the ________ principle.
A)comparison
B)accrual
C)matching
D)revenue recognition

Question

Quizplus · Accepted Answer

The matching principle ensures that expenses are recorded when they are incurred during the period, and then those expenses are matched against the revenues of the period in order to accurately determine the profitability of the business. This principle is crucial for accurate financial reporting and decision-making. Option A, Comparison, is not a widely recognized accounting principle. Option B, accrual, is a principle that recognizes revenue and expenses when they are earned or incurred, regardless of when the cash is received or paid. While similar to the matching principle, it is not the same. Option D, revenue recognition, is a principle that states that revenue should only be recognized when it is earned, regardless of when cash is received. This principle is different from the matching principle because it only deals with revenue and not with expenses.

The Accounting Principle That Ensures That All Expenses Are Recorded