What is meant by the matching principle

Assignment Help Accounting Basics

Reference no: EM131761226

Question: 1. The purpose of a trial balance is:

a. To detect fraudulent activities

b. To inform mangers of new government regulations before they become effective

c. To provide money for business operations

d. To check the equality of account balances in terms of debit and credits

2. What is meant by the Matching Principle?

a. Assets equal Liabilities and Equity

b. Debits equal Credits

c. Expenses incurred in generating revenues should be matched with the related revenues when determine

d. Revenue matches expenses

3. Cash equivalents:

a. Are readily convertible to a known cash amount.

b. Include short-term investments purchased within 3 months of their maturity dates.

c. Have a market value that is not sensitive to interest rate changes.

d. Include short-term U.S. treasury bills.

e. All of these.

Reference no: EM131761226

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