"Revenue earned and cost of earning that revenue should be properly identified for a period. " Explain this statement.
Answers
Explanation:
The above quoted statements highlights the importance of matching principle. As per the principle the revenues earned during a period should be correctly matched against the expenses incurred by a firm during an accounting period to correctly report the accounting profits earned during a year. Accordingly, there is a need to ascertain and report the corrected revenues and cost of earning revenue so as to account for corrected profits.
Answer:
The above quoted statements highlights the importance of matching principle. As per the principle the revenues earned during a period should be correctly matched against the expenses incurred by a firm during an accounting period to correctly report the accounting profits earned during a year. Accordingly, there is a need to ascertain and report the corrected revenues and cost of earning revenue so as to account for corrected profits.
Explanation:
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