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Us gaap matching principle12/9/2023 ![]() The matching principle is quintessential for accounting and reporting as it ensures the coherence and accuracy of financial reports where the revenues and expenses have a cause-effect relationship for a given accounting period. This principle ensures that timeliness and true financial reporting are done, forming the bedrock of sound decision-making. ![]() The matching principle applies to small businesses and all the accounts mentioned in a chart of company accounts. The matching principle and accrual accounting are contrary to the cash basis of accounting, where business transactions are recorded based on receipt or payment of cash. The matching principle is similar to the accrual basis of accounting, which states that revenue and expenses are to be recognized as and when they are incurred, irrespective of whether cash is transferred. ![]()
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