Answer to Question #82700 in Accounting for Mustapha Babatunde

Question

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

Answer 1

According the Prudence concept all assets, revenues and profits should be recognized at the moment when they are certain, and all liabilities and expenses should be recognized when they are possible. The Matching concept requires to record revenues and expenses in the same reporting period, regardless when incomes were received and expenses are paid.