Discuss the matching principle

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Question: 1. Excite signed a pact with Netscape in 1999 under which it paid $86.1 million to share revenues from co-branded search-and-directory services. It wrote off two thirds of the cost-or $56.8 million- against income immediately. Analysts objected. Why should they?

2. Matching costs to revenue- the matching principle- is seen as producing "good quality" earnings numbers. Why?

Reference no: EM131491351

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