The matching principle is best demonstrated by:
A)Using debits to record decreases in owners' equity and credits to record increases.
B)The equation Assets = Liabilities + Owners' Equity.
C)Allocating the cost of an asset to expense over the periods during which benefits are derived from the asset.
D)Offsetting the cash receipts of the period with the cash payments made during the period.

Question

Quizplus · Accepted Answer

The matching principle is the concept that expenses should be recognized in the same period as the revenues they help to generate. This is best demonstrated by allocating the cost of an asset to expense over the periods during which benefits are derived from the asset. This ensures that the expense associated with the asset is matched with the revenue it helps to generate, resulting in more accurate financial statements. Choices A, B, and D do not relate specifically to the matching principle.

The Matching Principle Is Best Demonstrated By