Meaning of matching concept in accounting

2020-03-30 08:37

Matching principle is one of the most fundamental concepts in accrual accounting. In simple terms matching concept means, in relation to a given time period, the expenses that are recorded in the financial statements of a company must be related to the revenues generated in the exact same period.The matching concept is an accounting practice whereby firms recognize expenses in the same accounting period when they recognize related revenues. The matching concept purpose is to avoid misstating earnings for a period. Reporting revenues without all meaning of matching concept in accounting

Matching concept (convention or principle) of accounting defines and states that while preparing the income statement, revenue and profits are matched with the related expenses incurred in generating them. Though the business as a going concern is expected to run its operations for foreseeable future yet there is a dire need to determine its periodical profitability performance.

How can the answer be improved? Apr 17, 2016 The matching concept is a founding principle of accounting. In general, it means that expenses are recorded (matched) with the income that ismeaning of matching concept in accounting Definition of Matching Principle The matching principle is one of the basic underlying guidelines in accounting. The matching principle directs a company to report an expense on its income statement in the period in which the related revenues are earned.

Rating: 4.68 / Views: 966