What is the matching principle?
The matching principle means the same thing as accrual accounting, which is required under U.S. GAAP. It basically says that revenue and expenses should be recognized in the period earned (revenues) or incurred (expenses).
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What is the difference between cash basis and accrual basis accounting?
The key difference between cash accounting and accrual accounting is that under accrual accounting, revenue is recognized when earned. Under cash accounting, revenue is recognized when cash is received. Similarly, for expenses, under accrual accounting, expenses are recognized when incurred, while under cash accounting, expenses are recognized when cash is paid.
What is the difference between cash basis and accrual basis accounting?
The key difference between cash accounting and accrual accounting is that under accrual accounting, revenue is recognized when earned. Under cash accounting, revenue is recognized when cash is received. Similarly, for expenses, under accrual accounting, expenses are recognized when incurred, while under cash accounting, expenses are recognized when cash is paid.
