A dance studio accepts $1,500 to provide a series of dance lessons to a youth group during the month of July.The studio decides to record the revenue in July.The studio decided to record the July expenses of rent,utilities and salaries in August,when it pays for them.One or both of these decisions:

Question

Quizplus · Accepted Answer

The matching principle requires that expenses be recorded in the same period as the revenues they help to generate. By recording expenses in August instead of July, the studio violates the matching principle.

A Dance Studio Accepts $1,500 to Provide a Series of Dance