CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

According to the matching principle, ______
A. a firm's operating performance is measured properly when revenues and expenses related to one another in a given time period are taken into account.
B. a firm should match the value of its assets and liabilities on the balance sheet.
C. a firm should match its depreciation accounting for tax and reporting purposes.
Explanation: The matching principle states that a firm must match its expenses to revenues earned in a given period. If an expense is incurred but there is no related revenue, the expense must be deferred to a later period when revenue is recognized.

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