Question

Madeline is recording revenues and expenses. When doing this, she is following the guidance set forth in which of the following Statements of Financial Accounting Concepts?

Answer 1

Answer:

It is called matching concept

Explanation:

Matching concept : It states that revenues generated for a particular period should be matched with expenses incurred in generating same revenue.

The rationale is that, it is impossible to generate revenue without incurring operational and other expenses required for running the business,hence, the two must be matched together to establish if there is profit or loss.