The Matching Principle Requires That Expenses Get Recorded in the Same

question 174

True/False

The matching principle requires that expenses get recorded in the same accounting period as the revenues that are earned as a result of the expenses, not when cash is paid.

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Definitions:

Tax Proration

The division of property taxes, insurance premiums, or other charges in proportion to time or use.

Annual Tax Bill

The total amount of taxes levied annually by various governmental entities, including federal, state, and local taxes.

Tax Rate

The rate at which a person or business is taxed by the government.

Tax Proration

The division or allocation of taxes between parties (such as buyers and sellers) based on their period of ownership or usage.