Hi
Matching.concept is used in both Accrual vs. Cash basis of accounting.
eg.
Accruals- If a company wants to pay supplier next year, then
2021
Purchases a/c
To Payables a/c
Cash basis- if a company wants to pay the supplier next year, then
2022
Purchases a/c 200₹
To Bank a/c 200₹
Thus, this principle works as a core principle to record transactions for any given year I.e., debit and credit is posted in the same period. Revenue and expenses are matched to the same year, so revenue arising in 2021, but payments made in 2022, both revenue and expenses will be recorded in 2022 as complete receipts is fulfilled in a year.
So, revenue & purchases related to 200₹ purchases will be recorded in 2022.
CAclubindia
