Answer to Question #82245 in Accounting for Amaka

Question

What is the difference between Prudence concept and Matching concept? Using two sentences.

Answer 1

The Matching concept states that a firm should record its revenues and related expenses together in the same reporting period, regardless when cash is received or expenses are paid. The Prudence concept is more conservative and requires to recognize assets, revenues and profits when it is certain and to record expenses and liabilities when they are possible