The matching principle in accounting requires the matching of debits and credits.
Identify whether the given statement is true or false.
Answer to Problem 1TF
False statement.
Explanation of Solution
Matching principle: According to this principle, the expense should be recognized when it is actually incurred, doesn’t matter, payment is made or not. This principle ensures that the expenses incurred in the current period are matched against the revenues earned in the same period. Matching principle is sometimes called as expense recognition principle.
The matching principle helps in matching the revenue earned during the year with the respective expense incurred to produce the revenue.
Therefore, for the given statement “The matching principle in accounting requires the matching of debit and credits” is false.
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Chapter 5 Solutions
Bundle: College Accounting, Chapters 1-27, Loose-leaf Version, 22nd + Cengagenowv2™, 2 Terms Printed Access Card For Heintz/parry's College ... Set For College Accounting, 22nd + Cenga
- When dealing with receivables, give an example of a subsidiary account.arrow_forwardDescribe the relationship between debit balances and credit balances when it comes to “t graphs”?arrow_forwardWhich of the following states that a transaction is not recorded in the books of accounts unless it is measurable in terms of money? a. Matching principle. b. Revenue recognition principle. c. Time period assumption. d. Monetary unit assumption.arrow_forward
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning