Question

The ________ requires that the costs incurred to generate a particular revenue should be recognized as expenses in the same period that the revenue is recognized. a. materiality concept b. consistency concept c. matching principle d. going concern assumption

Answer 1

c. matching principle

Step-by-step explanation:

In accounting, one of the underlying principles is the matching concept which requires that a company reports the expenses in the statement of profit or loss along with the related revenue earned in the same period.

It seeks to ensure that expenses are matched to the revenue generated from the activities that resulted in the company incurring such expense.

Hence the matching principle requires that the costs incurred to generate a particular revenue should be recognized as expenses in the same period that the revenue is recognized.