Which principle holds that all the expenses incurred in earning revenue should be identiﬁed with the revenue recognized and reported for the same period?
A) Revenue principle.
B) Matching principle.
C) Timing principle.
D) Liability principle.

Question

Quizplus · Accepted Answer

The matching principle in accounting states that expenses should be recorded during the period in which they are incurred, regardless of when the transfer of cash occurs. This principle is crucial for the accrual basis of accounting, ensuring that all expenses related to revenue are matched to the same period as the revenue, providing a more accurate picture of a company's financial performance.

Which Principle Holds That All the Expenses Incurred in Earning