Question

What types of accounts are “matched” when the matching concept is used in a discussion of accrual accounting?

Answer 1

Matching concept is a principle which advocates that expenses should be matched with the revenues of the related period. Matching concept will be combining the principles of both revenue recognition as well as accrual accounting and there is no place for cash aaccounting using the matching concept.

Expenses of a particular period are matched with the revenues of a particular period in order to follow the accrual concept of the accounting and providing the users of accounting a better view of presentation of income and expenditure so it will be helpful for them in order to match expenses with the income and provide a better profit related statement.