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Which accounting principle requires that expenses be matched with revenues in th

Practice Questions

Q1
Which accounting principle requires that expenses be matched with revenues in the trial balance?
  1. Revenue Recognition Principle
  2. Matching Principle
  3. Cost Principle
  4. Conservatism Principle

Questions & Step-by-Step Solutions

Which accounting principle requires that expenses be matched with revenues in the trial balance?
  • Step 1: Understand that in accounting, we need to keep track of money coming in (revenues) and money going out (expenses).
  • Step 2: Learn about the Matching Principle, which is a rule in accounting.
  • Step 3: The Matching Principle says that we should record expenses in the same time period as the revenues they help to generate.
  • Step 4: This means if you earn money in a month, you should also record the expenses related to that money in the same month.
  • Step 5: This helps to give a clear picture of how much profit or loss a business made during that time.
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