Final answer:
Accounting for prior service cost prospectively would violate the matching concept because the services were completed in previous periods.
Step-by-step explanation:
The statement is True.
Accounting for prior service cost prospectively means recognizing the cost of employee services that were completed in previous periods in the current period's financial statements. However, this would violate the matching concept in accounting. The matching concept states that expenses should be recognized in the same period as the corresponding revenues. Since the services performed by the employees were completed in previous periods, recognizing the prior service cost in the current period would not match the expenses with the corresponding revenues.
For example, if an employee receives a pension benefit for past services performed, recognizing the cost of those past services in the current period would not accurately match the expense with the revenue generated from those past services.