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Basic Question 2 of 24
The matching principle ______
B. is used in accrual accounting to determine the proper period in which to recognize revenue.
C. is used in accrual accounting to determine the proper period for recognition of expenses.
A. applies only to situations in which a cash payment occurs before an expense is recognized or a cash receipt occurs before revenue is recognized.
B. is used in accrual accounting to determine the proper period in which to recognize revenue.
C. is used in accrual accounting to determine the proper period for recognition of expenses.
User Contributed Comments 5
| User | Comment |
|---|---|
| sunny | matching is to find expense. revenue recognition is to find revenue amount. |
| teddajr | match EXPENSE to revenue. |
| julescruis | good answers |
| bhaynes | The matching principal is an expense related concept. |
| Kevdharr | The realization principle is used in accrual accounting to determine the proper period in which to RECOGNIZE REVENUE (choice B) while the matching principle is used in accrual accounting to determine the proper period for RECOGNITION OF EXPENSES (choice C). |
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Learning Outcome Statements
describe general principles of expense recognition, specific expense recognition applications, implications of expense recognition choices for financial analysis and contrast costs that are capitalized versus those that are expensed in the period in which they are incurred
CFA® 2024 Level I Curriculum, Volume 2, Module 2.