Matching Principle of Accounting : According to this principle, cost of a particular period should be charged from the revenue of same period only. This principle provides the guidelines as to how the expenses are to be matched with revenue. For matching costs with revenue, first revenue should be recognized and then costs incurred for generating that revenue should be recognized. It requires that in determining the net profit, all costs which are applicable to revenue of that period should be charged against that revenue. The following points should be considered while matching costs with revenue : 

1. Cost of goods remaining unsold at the end of there year together with expenses incurred on them must be carried forward to the next year. 

2. When a item of revenue is included in the profitaodloss account, all expenses incurred on it whether paid or not, should be included in the profit and loss account. 

3. Incomes received in advance must be treated asa liability, while income earned but not received should be recognized as revenue.

4. If an amount is spent, but revenue from it will be earned in the next year, the amount should be carried down as an asset and should be shown as an expense next year.