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Unformatted text preview: The matching principle: to the extent that we can associate expenses with revenue , we recognize the expenses at the same time that we recognize the revenude Expenses that cannot be asscociated with specific revenue is recognized as it is incurred We don't necessarily recognize revenue and expenses when we pay and are paid If we recognized revenue and expenses as we pay and are paid, we would be using the "cash" basis of accounting Recognizing revenue when it is earned and realizable, and applying the matching principle to recognize expenses is called the "accural" basis of accounting...
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This note was uploaded on 12/17/2011 for the course ECON 101 taught by Professor Chapman during the Spring '11 term at Arcadia University.
- Spring '11