According to the matching principle, if costs associated with producing revenue in the current year are not paid in cash until the following year, the costs should be expensed in the current year.

Question

Quizplus · Accepted Answer

The matching principle requires that expenses be recognized in the same period as the related revenues. This means that if costs are incurred in a period but the corresponding revenue is not earned until a later period, the costs should still be recognized in the period in which they were incurred. This principle ensures that financial statements accurately reflect the economic activity of the business in each period.

According to the Matching Principle, If Costs Associated with Producing