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Regarding matching concept
Accountancy
Sir if we buy a house in an accounting period and sell it in another accounting period how is this concept relevant? Video Details ------------- Accounting - CA Foundation (New) Accounting Concepts, Principles And Conventions #2. Accounting Concepts - Part 1
Answers (1)
The matching concept is to match income and expenses/cost. When we buy a home in first year - we show it as an asset and not as expense. When we sell home in second year the sale value - cost price is recorded in P&L as gain. same way when we buy goods for sale - the unsold portion is shown as closing stock. and not as an expense. When we sell those goods, it gets expensed.
