The matching principle is best demonstrated by:________.
a. Offsetting the can receipts of the period with the cash payment made during the period
b. The equation asset = liabilities + owners equity
c. Using debits to record decreases in owners equity and credits to record
d. Allocating the cost of an asset to expense over the periods during which benefits are derived from the asset.

The matching principle is an accounting concept which states that the expenses incurred by a company and the revenue earned by the company should be recorded in the period to which they relate to. This means that for every revenue earned and expenses incurred, both must be matched on the company's income statement in the period the transactions occurred.

One of the benefits of matching principle is that it affords investors to see a normal income statement where revenues and expenditure are placed side by side hence enable them to know the true picture of the business. It therefore means that allocating the cost of an asset to expense over the periods during which benefits are derived from the asset is a matching principle concept in accounting.

deebikamadhivanan deebikamadhivanan · Answer 2 · 2022-02-02T09:10:20+01:00

Accounting principles are the rules and criteria that businesses must adhere to when reporting financial information.

Option d is the best demonstrated matching principle from the given choices.

The respective principle narrates

Allocating the cost of an asset to expense throughout the periods during which benefits are obtained from the asset best illustrates the matching principle.

The reasons for depicting the best

It is an accounting concept that states that a company's expenses and revenue should be recognized in the period in which they occur.

This means that every dollar of revenue made and dollar of expense incurred in a given time must be matched on the company's income statement.

One of the advantages of the matching principle is that it allows investors to see a standard income statement with revenues and expenses side by side, allowing them to understand the genuine picture of the company.

As a result, a matching principle notion in accounting is assigning the cost of an asset to expense throughout the periods during which benefits are obtained from the asset.

For more information about the matching principle, refer below

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