The Accounting Principle of Matching Is Best Demonstrated by

question 59

Multiple Choice

The accounting principle of matching is best demonstrated by

• A)not recognizing any expense unless some revenue is realized.
• B)associating effort (expense) with accomplishment (revenue).
• C)recognizing prepaid rent received as revenue.
• D)establishing an Appropriation for Contingencies account.

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Definitions:

Variable Costs

are costs that vary in proportion to the level of production or sales volume, such as raw materials and direct labor costs.

Output

Output usually refers to the total amount of goods and services produced by a company, industry, or economy within a specific period.

Total Revenue

The full amount of income generated by the sale of goods or services by a company before any costs or expenses are subtracted.

ATC

Average Total Cost, which is calculated by dividing the total cost of production by the quantity of output produced. It includes both fixed and variable costs.