The recognition of which of the following expenses exemplifies the application of the matching principle?
A)President's salary.
B)Research and development.
C)Cost of goods sold.
D)Advertising.

Question

Quizplus · Accepted Answer

Cost of goods sold is an example of an expense that applies the matching principle. The cost of goods sold represents expenses incurred in producing the goods sold during a period. By matching these costs with the revenue earned from selling the goods, the company can properly allocate expenses to the period in which they were incurred, resulting in a more accurate depiction of the company's financial performance.

The Recognition of Which of the Following Expenses Exemplifies the Application