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Adjustments and the Matching Principle
Quick questions on The matching principle explained: O-Level Principles of Accounts
4short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is the matching principle?Show answer
The matching principle says the expenses of a period should be matched against the income they helped to earn in the same period. So the cost of the goods sold is set against the sales they produced, and rent for the year is charged in that year, no matter when it was paid.
What is q1?Show answer
State which basis of accounting the matching principle requires. [1 mark]
What is q2?Show answer
Rent of \2\,400$ is paid for 12 months, of which 4 months fall in the next financial year. State this year's rent expense. [2 marks]
What is q3?Show answer
Explain why an unpaid electricity bill is still charged as an expense this year. [2 marks]
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