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Questions and Answers
What is the main purpose of the matching concept in accounting?
What is the main purpose of the matching concept in accounting?
- To calculate the net profit by matching revenue earned with expenses incurred during a specific period (correct)
- To consider the recognition of expenses as well as revenues
- To differentiate between the right to receive cash and actual receipt of cash
- To recognize outstanding prepaid and pre-receival expenses
Which accounting concept considers the recognition of expenses as well as revenues?
Which accounting concept considers the recognition of expenses as well as revenues?
- Periodicity concept
- Accrual concept (correct)
- Matching concept
- Realisation concept
How does the matching concept differ from the accrual concept?
How does the matching concept differ from the accrual concept?
- The matching concept recognizes outstanding prepaid and pre-receival expenses, while the accrual concept calculates net profit.
- The matching concept considers the recognition of expenses as well as revenues, while the accrual concept differentiates between the right to receive cash and actual receipt of cash.
- The matching concept calculates net profit, while the accrual concept recognizes outstanding prepaid and pre-receival expenses. (correct)
- The matching concept differentiates between the right to receive cash and actual receipt of cash, while the accrual concept calculates net profit.
