Explain about matching principle, Accounting Basics

Assignment Help:

Q. Explain about matching principle?

The matching principle need that expenses incurred in producing revenues is deducted from the revenues they generated during the accounting period. The matching principle is one of the fundamental principles of accounting. This matching of revenues and expenses is necessary for the income statement to present an accurate picture of the profitability of a business. Adjusting entries replicate unrecorded economic activity that has taken place but has not yet been recorded. Why has the company not documented this activity by the end of the period? One reason is that it is more economical and convenient to wait until the end of the period to record the activity. A second reason is that refusal source document concerning that activity has yet come to the accountant's attention.


Related Discussions:- Explain about matching principle

Journal entries, on april-1,2005,raghu started a business of selling steel ...

on april-1,2005,raghu started a business of selling steel pipes and angles.he invested cash of Rs.50,00,000 & opened a current a/c with bank for Rs.20,00,000.He took loan from ICIC

Relevance information to financial reporting, Q. Relevance information to f...

Q. Relevance information to financial reporting? To have relevance information should be pertinent to or affect a decision. The information should make a difference to someone

Accounting error, the books of deven verma could not be tallied.the account...

the books of deven verma could not be tallied.the accountant transferred the difference of Rs.1270 in the suspense account on the debit side the following mistakes were found later

MRSRAMOS, I AM HAVING DIFFICULTIES SOLVING ONE PARTICULAR ACCOUNTING PROBLE...

I AM HAVING DIFFICULTIES SOLVING ONE PARTICULAR ACCOUNTING PROBLEM

Complicated type of business, Q. Complicated type of business? Your stu...

Q. Complicated type of business? Your study of accounting began with service companies as instance because they are the least complicated type of business. You are at present r

ACC 250, Matilda Crone owns and operates a public relations firm called Dan...

Matilda Crone owns and operates a public relations firm called Dance Fever. The following amounts summarize her business on August 31, 2014:

Continuity concept, Accounting supposes that the business as an accounting ...

Accounting supposes that the business as an accounting entity will continue to operate for a long time in the future, unless there is superior evidence to the contrary. The enterpr

Explain statement of retained earnings, Q. Explain Statement of retained ea...

Q. Explain Statement of retained earnings? The statement of retained earnings demonstrates the change in retained earnings between the beginning and end of a period e.g. a mont

Accounting conventions, Accounting conventions The phrase 'convention' ...

Accounting conventions The phrase 'convention' is used to signify customs or ethnicity as a guide to the research of accounting statements. A variety of accounting conventions

What is cost of goods sold, Q. What is Cost of goods sold? The second m...

Q. What is Cost of goods sold? The second major division of an income statement for a merchandising business is cost of goods sold. Cost of goods sold is denotes to cost to the

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd