Which of the following is an incorrect statement regarding the matching principle?
A) Expenses are recognized when they make a contribution to revenue.
B) Costs are never charged to the current period as an expense simply because no connection with revenue can be determined.
C) In recognizing expenses, accountants attempt to follow the approach of let the expense follow the revenue.
D) If no direct connection appears between costs and revenues, but the costs benefit future years, an allocation of cost on some systematic and rational basis might be appropriate.

Question

Quizplus · Accepted Answer

The incorrect statement is B because the matching principle allows for expenses to be charged to the current period if they are incurred in generating the revenue of that period, even if a direct connection to specific revenue cannot be determined. This principle aims to match expenses with the revenues they help to generate within the same period, whenever possible.

Which of the Following Is an Incorrect Statement Regarding the Matching