The matching principle calls for the accountant of a firm to:
A) identify an asset with each liability of the firm.
B) associate the revenue generated from a sale to the costs or expenses incurred to generate the revenue.
C) match each item of inventory with the historical cost at which it was acquired.
D) None of the above.

Question

Quizplus · Accepted Answer

The matching principle requires accountants to associate the revenue generated from a sale to the costs and expenses incurred to generate that revenue. This ensures that the financial statements provide an accurate representation of the firm's profitability in a given period. Options A and C are not correct because they do not relate to the matching principle. Option D is incorrect because the question asks for what the matching principle requires accountants to do, and "none of the above" does not provide a specific answer.

The Matching Principle Calls for the Accountant of a Firm