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Which accounting principle requires expenses to be matched with revenues?

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Question: Which accounting principle requires expenses to be matched with revenues?

Options:

  1. Revenue Recognition Principle
  2. Matching Principle
  3. Cost Principle
  4. Conservatism Principle

Correct Answer: Matching Principle

Solution: 

The Matching Principle requires that expenses be matched with the revenues they help to generate in the same accounting period.

Which accounting principle requires expenses to be matched with revenues?

Practice Questions

Q1
Which accounting principle requires expenses to be matched with revenues?
  1. Revenue Recognition Principle
  2. Matching Principle
  3. Cost Principle
  4. Conservatism Principle

Questions & Step-by-Step Solutions

Which accounting principle requires expenses to be matched with revenues?
  • Step 1: Understand that businesses earn money (revenue) and spend money (expenses).
  • Step 2: Learn that the Matching Principle is a rule in accounting.
  • Step 3: Know that this principle says expenses should be recorded in the same time period as the revenues they help to create.
  • Step 4: Realize that this helps to show a clear picture of how much money a business is really making or losing.
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