Explain the matching principle. What will be an ideal ...

[jessicacav]

Explain the matching principle.
 
  What will be an ideal response?

Question 2

Which is NOT a reason that businesses use QuickBooks computerized accounting?
 a. QuickBooks will only allow input of balanced transactions.
   b. Transactions are automatically posted to the ledger.
   c. Paper and pencil is more reliable for keeping track of accounting records.
   d. QuickBooks prepares the financial statements based on entered information.
   e. None of the above.

[thall411]

Answer to Question 1

A major objective of accounting is the determination of periodic net income, specifically by matching appropriate costs with revenues (the accrual method of accounting). Because revenues continuously flow into a business, the matching principle requires that:
a) A specific reporting period be selected (month, quarter, or year)
b) Revenues be measured within the specific reporting period (earned regardless of receipt)
c) Costs incurred be matched with the reported revenues
d) Costs be deducted from the reported revenues to determine the period's net income

Answer to Question 2

c