Under the accrual basis of accounting, many of the account balances in the ledger at the end of the accounting period are reported in the financial statements without change. Some accounts require updating, though. When preparing financial statements, the economic life of the business is divided into time periods. The matching concept states thata. A purchase made by a business is matched with the actual cost of the item. b. The expenses incurred during a period are matched with the revenue that those expenses generated. c. The transactions of a business are matched with the transactions of its owner, creditors and other businesses. d. The accounting records and reports are matched with objective evidence.

Question

Business

Reuben Mcguire

24 September, 10:46

Under the accrual basis of accounting, many of the account balances in the ledger at the end of the accounting period are reported in the financial statements without change. Some accounts require updating, though. When preparing financial statements, the economic life of the business is divided into time periods. The matching concept states thata. A purchase made by a business is matched with the actual cost of the item. b. The expenses incurred during a period are matched with the revenue that those expenses generated. c. The transactions of a business are matched with the transactions of its owner, creditors and other businesses. d. The accounting records and reports are matched with objective evidence.

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Giovanni Gallagher · Answer 1

b. The expenses incurred during a period are matched with the revenue that those expenses generated.

Explanation:

According to the matching principle, incomes and expenses must be recorded when they are generated. This principle is one of the foundations of the accrual basis of accounting. This principle is the opposite of under cash basis accounting. Where the incomes and expenses are recorded when they are paid.