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    Question

    Cost or expenses must be recorded at the same time as

    the revenue to which they correspond is specified by which principle?
    A Matching Principle Correct Answer Incorrect Answer
    B Going Concern Principle Correct Answer Incorrect Answer
    C Consistency Principle Correct Answer Incorrect Answer
    D Prudence Principle Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    According to the Matching Principle, expenses should be recognized in the same period as the revenues they helped generate, regardless of when the actual cash payment occurs. This principle ensures that the financial statements reflect the true profitability of a business by matching the expenses incurred to generate revenues in the same accounting period.

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