easy · Financial Accounting accounting-cycle-financial-statements
Under US GAAP, the 'Matching Principle' (Expense Recognition) primarily requires that:
- Expenses must match the cash outflows of the current month.
- Expenses be recognized in the same period as the revenues they helped generate.
- Total debits must always match total credits in every journal entry.
- Taxable income must match the net income reported on the financial statements.
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