The Matching Principle Is

question 96

Multiple Choice

The matching principle is:

• A) A valuation method.
• B) An expense recognition accounting principle.
• C) A cash basis reporting principle.
• D) An asset classification procedure.

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Definitions:

Variable Costs

Variable costs are expenses that change in proportion with the level of output or activity in a business.

Fixed Selling Expenses

Costs that do not fluctuate with sales volume, such as salaries of sales staff and advertising expenses.

Flexible Budget Graph

A visual representation that shows different levels of revenue and expenses based on varying levels of activity.

Direct Labor Hours

The total time workers spend creating a product or providing a service, directly contributing to the finished goods.