What does matching principle mean?

Definitions for matching principle
match·ing prin·ci·ple

Here are all the possible meanings and translations of the word matching principle.

Wikipedia

  1. Matching principle

    In accrual accounting, the revenue recognition principle states that revenues should be recorded during the period in which they are earned, regardless of when the transfer of cash occurs. And the matching principle instructs that an expense should be reported in the same period in which the corresponding revenue is earned, and is associated with accrual accounting. By recognizing costs in the period they are incurred, a business can see how much money was spent to generate revenue, reducing "noise" from timing mismatch between when costs are incurred and when revenue is realized. Conversely, cash basis accounting calls for the recognition of an expense when the cash is paid, regardless of when the expense was actually incurred.If no cause-and-effect relationship exists (e.g., a sale is impossible), costs are recognized as expenses in the accounting period they expired: i.e., when have been used up or consumed (e.g., of spoiled, dated, or substandard goods, or not demanded services). Prepaid expenses are not recognized as expenses, but as assets until one of the qualifying conditions is met resulting in a recognition as expenses. Lastly, if no connection with revenues can be established, costs are recognized immediately as expenses (e.g., general administrative and research and development costs). Prepaid expenses, such as employee wages or subcontractor fees paid out or promised, are not recognized as expenses; they are considered assets because they will provide probable future benefits. As a prepaid expense is used, an adjusting entry is made to update the value of the asset. In the case of prepaid rent, for instance, the cost of rent for the period would be deducted from the Prepaid Rent account.

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Numerology

  1. Chaldean Numerology

    The numerical value of matching principle in Chaldean Numerology is: 8

  2. Pythagorean Numerology

    The numerical value of matching principle in Pythagorean Numerology is: 6

Images & Illustrations of matching principle

  1. matching principlematching principlematching principlematching principlematching principle

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    a decorative musical accompaniment (often improvised) added above a basic melody
    • A. excogitate
    • B. exacerbate
    • C. flub
    • D. descant

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