A: The Matching Concept requires expenses to be matched with revenues. R: This concept is the basis for the accrual system of accounting. Choose the correct option. MCQ with Answer and Explanation
A: The Matching Concept requires expenses to be matched with revenues. R: This concept is the basis for the accrual system of accounting. Choose the correct option.
A. A is true but R is false
B. Both A and R are true but R is NOT the correct explanation of A
C. A is false but R is true
D. Both A and R are true and R is the correct explanation of A
Answer: Option D
Solution (By JKSSB Mock Tests)
The Matching Concept dictates that expenses incurred to earn revenue must be recognized in the same period as the revenue. This necessitates the accrual system, where transactions are recorded when they occur, not when cash changes hands. R correctly explains A.
Explanation:
Under Fair Value, items are reported based on current market valuations, replacing the traditional historical cost concept for many financial instruments.
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