Expense Recognition Principle (Matching Principle)

Definition

Expenses should be recorded in the same period as the revenues they help generate. Ensures accurate income measurement.

Related Terms

Accrual Accounting

A system that records revenue when it's earned and expenses when they're incurred—regardless of when cash changes hands. It's like using a credit card: the purchase happens today even if you pay the bill next month.

Learn More About Accounting

Explore our free lessons and practice labs to master accounting concepts.

Browse Lessons View All Terms