Question

The matching principal requires that expenses be matched with revenues

f or t

Answer 1

The statement is False

The matching principle says the entity should report the expenses in the income statement in same period in which the revenue is earned. The matching principle is associated with the Accrual basis of accounting. For example, assume the revenue is generated by providing service evenly throughout the year and a 1% of revenue is paid to the staffs on the second week of next month. Here, the payment to staff for generating the revenue should be accounted in the same month in which the revenue is generated.

So, it is not matching the expense with revenue.