Sally Smith had expenses of $800 in June which she paid in July.She reported these expenses on her June income statement.By doing this,she is following the accounting principle of:
A)Revenue realization.
B)Adequate disclosure.
C)Matching.
D)Conservatism.

Question

Quizplus · Accepted Answer

Sally Smith is following the accounting principle of matching, which requires that expenses be recognized in the same period that the related revenue is recognized. By reporting the expenses on her June income statement, even though they were paid in July, she is matching the expenses to the period in which they were incurred, which is in line with this principle.

Sally Smith Had Expenses of $800 in June Which She