Matching Principle

Definition: the Matching Principle is the crucial concept in accounting and finance that holds that the costs incurred in a specific time period must match with the revenue of that time period.

The matching principle is one of the fundamental concepts of accrual accounting. The accrual accounting concept recognizes income at the time when it is earned and recognizes the expense when it is incurred; used, or consumed.

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More on accounting and auditing: Accounting Cycle, Accounts Payable, Accounts Receivable, Amortization, Appreciation, more...

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