The Practice of Matching

question 32

Multiple Choice

The practice of matching

• A) dictates that efforts (expenditures) be matched with associated cash flow.
• B) requires arbitrary allocation of an asset's contribution to a revenue stream.
• C) illustrates the cause and effect relationship between money spent to earn revenues and the revenues themselves.
• D) is required by GAAP to approximate an asset's contribution to an entity's periodic cash flow.

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Definitions:

Business Enterprise

An organizational entity involved in commercial, industrial, or professional activities with the goal of generating economic returns.

Information Management

The process of collecting, storing, managing, and distributing information in an efficient and effective manner to support business processes.

Legal Entity

An organization that has legal rights and obligations, such as a corporation, partnership, or sole proprietorship.

Partnership Affairs

Partnership Affairs refers to the various business activities, decisions, and responsibilities managed between partners in a business partnership, including profit distribution, losses, and decision-making processes.