Asked by George Maillard Jr. on May 08, 2024
Verified
The matching principle
A) addresses the relationship between the journal and the balance sheet
B) determines whether the normal balance of an account is a debit or credit
C) requires that the dollar amount of debits equal the dollar amount of credits on a trial balance
D) states that the revenues and related expenses should be reported in the same period
Matching Principle
An accounting concept that expenses should be recorded in the same period as the revenues they helped to generate.
Revenues
The total amount of money generated by the sale of goods or services related to a company's primary operations.
Expenses
The economic costs that a business incurs through its operations to earn revenue.
- Identify the principles of revenue recognition and expense matching in relation to the preparation of financial statements.
Verified Answer
FC
Faith ConnellyMay 10, 2024
Final Answer :
D
Explanation :
The matching principle states that the revenues and related expenses should be reported in the same period, in order to accurately reflect the financial performance of the business. This helps ensure that the financial statements provide useful information to users for decision making.
Learning Objectives
- Identify the principles of revenue recognition and expense matching in relation to the preparation of financial statements.