The practice of matching
A) dictates that efforts (expenditures) be matched with associated cash flow.
B) requires arbitrary allocation of an asset's contribution to a revenue stream.
C) illustrates the cause and effect relationship between money spent to earn revenues and the revenues themselves.
D) is required by GAAP to approximate an asset's contribution to an entity's periodic cash flow.

Question

Quizplus · Accepted Answer

The practice of matching illustrates the cause and effect relationship between money spent to earn revenues and the revenues themselves. It is a fundamental concept in accrual accounting and helps to ensure that financial statements accurately reflect an entity's performance over a period of time.

The Practice of Matching