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What is the Matching Principle?
Why Matching is Important to Accountants?One of the basic accounting principles; it is followed to create a consistency in the income statements, balance sheets, etc.
Financial statements may be greatly distorted if expenses are recognized earlier rather than later and vice versa; jeapordizing the quality of the statements and providing an unfair representation of the financial position of the business.
- Recognizing an expense earlier than is appropriate lowers net income
- Recognizing an expense later than appropriate raises net income.
Take a look at some useful accounting terms for clarification.
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