Which of the following statements is true concerning the matching principle?
A)All costs can be directly matched with revenue.
B)All costs can be indirectly matched with periods in which they provide a benefit.
C)The association of assets for a period with the liabilities necessary to generate the assets is known as the matching principle.
D)Cost of goods sold matched with sales revenue is a classic example of direct matching under the matching principle.

Question

Quizplus · Accepted Answer

The matching principle states that expenses should be recognized and matched with the revenues they helped to generate in the same accounting period. Cost of goods sold is directly matched with sales revenue because they are both part of the same transaction, the sale of goods. Therefore, option D is the correct statement about the matching principle. Option A is incorrect because not all costs can be directly matched with revenue. Option B is incorrect because not all costs provide benefits in the same period, and some costs may be difficult to allocate to a specific period. Option C is incorrect because the association of assets and liabilities is part of accrual accounting but not necessarily the matching principle.

Which of the Following Statements Is True Concerning the Matching