Which of the following statements regarding the matching principle is correct?
A) Tax accounting strictly follows the matching principle.
B) The matching principle of financial accounting is an important component of the cash method of accounting.
C) The matching principle of financial accounting is sometimes relevant to timing deductions for an accrual basis axpayer's recurring items.
D) The matching principle has no relevance to tax accounting.
E) None of the above.

Question

Quizplus · Accepted Answer

The matching principle of financial accounting is relevant to timing deductions for an accrual basis taxpayer's recurring items, such as prepaid expenses or accrued liabilities. Tax accounting does not strictly follow the matching principle, and the matching principle is not an important component of the cash method of accounting. Therefore, options A, B, D, and E are incorrect.

Which of the Following Statements Regarding the Matching Principle Is