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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

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BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
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Is the matching concept related to (a) the cash basis of accounting or (b) the accrual basis of accounting?

To determine

Accrual basis of accounting:

Accrual basis of accounting means the revenues, and their related expenses of the business are reported during the period in which the event occurs, even if the cash is not exchanged.

Cash basis of accounting:

Cash basis of accounting means the revenues, and their related expenses of the business are reported when there is an exchange of cash.

To describe: The matching concept whether relates to the cash basis of accounting or the accrual basis of accounting.

Explanation

In this concept, the expenses should match with the revenue (matching principle) in the period when the company incurred expense...

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