Practice question · True or false
The matching principle says expenses should be recorded in the same period as the revenues they helped generate.
Hints
- The principle ties costs to the revenues they helped produce.
- It is the reason adjusting entries are needed at all.
Show the answer
True
Why
Matching is the reason adjusting entries exist: cash timing is irrelevant, what matters is which period's revenue benefited from the cost.
Practise Adjusting Entries
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More questions on Adjusting Entries
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