The idea that expenses should be shown in financial statements in the same period in which they help the company earn revenues is referred to as
A) Matching
B) Going concern
C) Historical cost
D) Cash basis accounting

Question

Quizplus · Accepted Answer

The idea of matching requires that expenses be recognized in the same period as the revenue they help generate. This is a fundamental accounting concept known as the matching principle. Option B (Going concern) is a concept that assumes the company will continue to operate for the foreseeable future. Option C (Historical cost) is a method of accounting that values assets at their original cost. Option D (Cash basis accounting) recognizes revenues and expenses only when cash is received or paid out.

The Idea That Expenses Should Be Shown in Financial Statements