0
Explain how the concept of Matching Expenses with revenue relates to adjustments?
Wiki User
∙ 8y agoWant this question answered?
Be notified when an answer is posted
Add your answer:
Earn +20 pts
Matching revenues and expenses refers to?
Matching revenues and expenses is called "Matching concept" of Accounting.
Does The matching concept supports matching expenses with the related revenues?
True
What is the matching concept in financial accounting?
The Matching Concept: A significant relationship exists between revenue and expenses. Expenses are incurred for the for the purpose of producing revenue. In measuring net income for a period, revenue should be offset by all the expenses incurred in producing that revenue. This concept of offsetting expenses against revenue on the basis of "causes and effect" is called the Matching Concept. The term 'matching' means appropriate association of related revenues and expenses. In matching expenses against revenue the question when the payment was made or received is 'irrelevant'. For example if a salesman is paid commission in January, 2001, for sale made by him in December, 2000. According to this concept commission expense should be offset against sales of December 2000 because this expense is incurred for producing revenue in December 2000. On account of this concept, adjustments are made for all outstanding expenses, accrued revenues, prepaid expenses and unearned revenues, etc, while preparing the final accounts at the end of the accounting period.
The matching concept requires expenses be recorded in the same period that the related revenue is recorded?
true
How accrual basis of accounting is related to matching concept?
Accrual basis accounting system is based on the concept of matching principle which dictates that revenues of same fiscal year should be matched with expenses of same fiscal year.
Matching revenues and expenses refers to?
Matching revenues and expenses is called "Matching concept" of Accounting.
Does The matching concept supports matching expenses with the related revenues?
True
What is the matching concept in financial accounting?
The Matching Concept: A significant relationship exists between revenue and expenses. Expenses are incurred for the for the purpose of producing revenue. In measuring net income for a period, revenue should be offset by all the expenses incurred in producing that revenue. This concept of offsetting expenses against revenue on the basis of "causes and effect" is called the Matching Concept. The term 'matching' means appropriate association of related revenues and expenses. In matching expenses against revenue the question when the payment was made or received is 'irrelevant'. For example if a salesman is paid commission in January, 2001, for sale made by him in December, 2000. According to this concept commission expense should be offset against sales of December 2000 because this expense is incurred for producing revenue in December 2000. On account of this concept, adjustments are made for all outstanding expenses, accrued revenues, prepaid expenses and unearned revenues, etc, while preparing the final accounts at the end of the accounting period.
What is the accrual concept of accounting?
The accrual concept concerns the matching of costs and revenues for the reporting period.
What is the difference btwn Matching Accrual and realization concept?
Accrual concepts use the matching of expenses to get an overall picture of a person's account. A realization concept is based on the results of the accrual process.
The matching concept requires expenses be recorded in the same period that the related revenue is recorded?
true
How accrual basis of accounting is related to matching concept?
Accrual basis accounting system is based on the concept of matching principle which dictates that revenues of same fiscal year should be matched with expenses of same fiscal year.
The broad principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses is the?
The accruals concept, otherwise known as the matching concept as it's purpose is to match expenses and revenue to each other in the correct accounting period.
What is the matching principle?
The Matching Principle is a rule that requres that expenses be recorded and reported in the same period as the revenue that those expenses help earn. It is a fundamental concept of accrual accounting as it is the association between the economic benefits (revenue) and economic cost (expenses) that is used to calculate profit (which is a measure of performance).
What is matching principles?
The Matching Principle is a rule that requres that expenses be recorded and reported in the same period as the revenue that those expenses help earn. It is a fundamental concept of accrual accounting as it is the association between the economic benefits (revenue) and economic cost (expenses) that is used to calculate profit (which is a measure of performance).
Is the matching concept related to the cash basis of accounting or the accrual basis of accounting?
Matching concept is the basis of accrual accounting system under which all expenses to earn revenue should be match within same fiscal year so it is part of accrual accounting system
What is and advantage of the matching concept?
By matching your income with the expenses of a given period.. you do not over-state nor under-state the value of the business thus giving you the "true" profit ofthe business. By matching your income with the expenses of a given period.. you do not over-state nor under-state the value of the business thus giving you the "true" profit ofthe business.
