matching concept


matching concept
An essential principle of accrual accounting in which revenue and expenditure are not allocated to accounting periods on the basis of cash received or paid, but matched within one particular period so that the profit for the period can be determined. The revenue to be recognized for a particular period is determined and the costs incurred in achieving that revenue matched against it. This process involves some arbitrary decisions involving, for example, depreciation; it can lead to creative accounting or profits that are determined subjectively.

Accounting dictionary. 2014.

Look at other dictionaries:

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