MATCHING CONCEPT ACCOUNTING PRINCIPLE

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All about accounting :- 13th blog.


                *****ACCOUNTING*****

Hi freinds 🙏.,
           Today's discuss 8th accounting principles...

 So let's discuss...

  ★ MATCHING CONCEPT :- 
🔥 Matching principle is a part of the Generally accepted accounting principle [GAAP].
The matching principle states that expenses should be recognized and recorded when those expenses can be matched with the revenues those expenses helped to generate. For eg :- cannot be matched to any specific revenue stream. These expenses are recorded in the current period.

  * Definition of matching concept :- The Matching Principle states that all expenses must be matched in the same accounting period as the revenues they helped to earn. In practice, matching is a combination of accrual accounting and the revenue recognition principle.

   * Difference between matching concept and accrual concept :- 
The difference between the two concepts is that accrual concept is the function of time or period, whereas the matching concept is the function of either a unit of product or business/division as a unit.

  * Importance of matching concept :- 
The matching principle is important because the proper matching of expenses and revenues gives a more accurate appraisal of the results of operations, helps to avoid distortion of the financial position of the business, and improves the quality of the financial statements.

💥 Elements of matching principle :- 

1. Period costs :- These are shown on the financial statement as and when the company incurs them.

2. Product costs :- Product cost include expenses such as direct material labour and factory overhead.



★Remaining 5 principles discuss in 14th blog..★
                                   
                                  ★So wait my 14th blog.....★

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