Question

Which of the following entries would be made because of the matching principle?

A. Cash 1,000
Salaries Expense 1,000
B. Cash 1,000
Unearned Revenue 1,000
C. Salaries Expense 1,000
Service Payable 1,000
D. Salaries Expense 1,000
Salaries Revenue 1,000
E. None of the above

Answer 1

The matching principle requires expenses to be matched to the revenues they help generate in the same period. Entry C (Salaries Expense 1,000 Service Payable 1,000) honors this accounting principle by recording the expense when the service was performed, not when payment was made.

Step-by-step explanation:

The question relates to the matching principle in accounting, which states that expenses should be recorded in the period in which they help to generate revenues. The correct entry that reflects the matching principle out of the given options would be C.) Salaries Expense 1,000 Service Payable 1,000. This entry recognizes the expense in the period in which the related services were performed, even though the cash payment has not yet been made, thus matching the expense with the revenues of the period.