24+ The Matching Concept Images. The purpose of the matching concept is to avoid misstating earnings for a period. If you need income tax advice please contact an accountant in your area.
Matching Principle Meaning Importance And More from efinancemanagement.com
Matching concept of accounting further implies that the revenues are recognized when they are earned and expenses are accounted for when they are the application of matching concept of accounting is not an easy task. Firms report revenues, that is, along with the expenses that brought them. Matching principle is the accounting principle that requires that the expenses incurred during a period be recorded in the same period in which the related revenues are earned.
In accrual accounting, the revenue recognition principle states that revenues should be recorded during the period in which they are earned, regardless of when the transfer of cash occurs.
The purpose of the matching concept is to avoid misstating earnings for a period. This concept tries to make sure that there no over or under revenue or expenses records in the financial statements. Firms report revenues, that is, along with the expenses that brought them. This concept of offsetting expenses against revenue on the basis of causes and effect is called the matching concept.
