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| 1. |
What is matching principal |
| Answer» Matching principle is the accounting principle that require that the expenses incurred during a period be recorded in the same period in which the related revenues are earned. This principle recognizes that businesses must incur expenses to earn revenue....<br>Matching Principle:\xa0According to this principle, all expenses incurred by any enterprises during an accounting period are matched with the revenue recognized during the same period.The matching principle facilitates to ascertain the amount of profit or loss incurred in a particular period by deducting the related expenses from the revenue recognized that period.The following treatment of expenses and revenue are done due to matching principle:(1) Ascertainment of Prepaid Expenses!(2) Ascertainment of Income received in advance.(3) Accounting of closing stock.(4) Depreciation charged on fixed assets. | |