The Matching Principle States That Expenses Should Be Matched with Revenues

question 77

Multiple Choice

The matching principle states that expenses should be matched with revenues because

• A) efforts should be matched with accomplishments.
• B) dividends should be matched with shareholder investments.
• C) cash payments should be matched with cash receipts.
• D) assets should be matched with liabilities.

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Definitions:

Adverse Supply Shock

An unexpected event that suddenly decreases the supply of a good or service, potentially leading to higher prices and lower output.

Short-Run Phillips

A concept describing the inverse relationship between unemployment and inflation within a short-term period.

Left

Politically, refers to ideologies and movements that typically advocate for social equality, government intervention in the economy to redistribute wealth, and the protection of social welfare programs.

Inflation Expectations

Inflation Expectations are the rate at which people expect prices to rise in the future, influencing their economic decisions.