What is matching principle, Accounting Basics

Assignment Help:

Q. What is matching principle?

Expense recognition is closely related to as well as sometimes discussed as part of the revenue recognition principle. The matching principle states that expenses must be recognized (recorded) as they are incurred to produce revenues. An expense is the outflow or else using up of assets in the generation of revenue. Firms voluntarily acquire expense to produce revenue. For illustration a television set delivered by a dealer to a customer in exchange for cash is an asset consumed to produce revenue its cost becomes an expense. Likewise the cost of services such as labour is voluntarily incurred to produce revenue.


Related Discussions:- What is matching principle

Trial balance, preparing trial balance with balance method

preparing trial balance with balance method

On december 31, On December 31, 2013, a company issues bonds with a par val...

On December 31, 2013, a company issues bonds with a par value of $600,000. The bonds mature in 10 years, and pay 6% annual interest, payable each June 30 and December 31. The bon

Annual interest of 5% paid if balance exceeds, Annual interest of 5% paid i...

Annual interest of 5% paid if balance exceeds 800, $7 monthly fee if account falls below minimum balance, average monthly balance $1,160, account falls below $800 during 5 months

Explain about cash equivalents, Q. Explain about Cash equivalents? Cash...

Q. Explain about Cash equivalents? Cash equivalents are highly liquid short-term investments obtained with temporarily idle cash and easily convertible into a known cash amount

Accrual method, Answer the following questions in 200 to 300 words: ...

Answer the following questions in 200 to 300 words: · Nonprofit organizations are required to produce financial statements based on the accrual method of accounting

Define bear market, Bear Market Bear market is a market in which stock...

Bear Market Bear market is a market in which stock prices are expected to fall.

Explain financial accounting information, Q. Explain Financial accounting i...

Q. Explain Financial accounting information? A Financial accounting information is precedent in nature that reporting on what has happened in the past. To facilitate comparison

Research state and local governmental financial accounting, You recently la...

You recently landed your dream job working for the state as an accountant. You are given the task to research several state and local governmental financial accounting issues. F

Difference between income statement and balance sheet, Difference between I...

Difference between Income Statement and Balance Sheet Difference between the amounts of the columns in Income Statement and Balance Sheet should be the same amount. Words "Net

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