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    papspl's Avatar
    papspl Posts: 1, Reputation: 1
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    #1

    Nov 25, 2006, 02:15 PM
    Matching revenues and expenses
    The concept of matching revenues and expenses refers to what?
    RichardBondMan's Avatar
    RichardBondMan Posts: 832, Reputation: 66
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    #2

    Nov 25, 2006, 04:59 PM
    "REX" or revenue to expenses ratio.
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #3

    Nov 25, 2006, 09:56 PM
    Quote Originally Posted by papspl
    The concept of matching revenues and expenses refers to what?
    The concept refers to the fact that you should match both the revenues and expenses in the period that they are earned/accrued.

    For exampleÖ

    In 2006, letís say you had $50,000 in sales and total expenses of $20,000. Therefore you made $30,000 profit.

    However, of those expenses, letís say you donít get one of the bills of $2,000 until Jan, 4, 2007. However, you already used the expense in 2006.

    Should that $2,000 be used to reduce your 2006 or 2007 income?

    It should be your 2006 income.
    shruthrao's Avatar
    shruthrao Posts: 1, Reputation: 1
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    #4

    Mar 3, 2012, 09:45 PM
    This is matching the cost incurred with the revenue earned ,which is important to find out the profit earned for that period.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #5

    Mar 4, 2012, 08:37 AM
    It is known as the Matching Principle as per U.S. GAAP (Generally Accepted Accounting Principles).

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