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Revenue is basically the income of a company or organization which is received after the sale of products or extending services to the customers. This can be accounted for as the turnover of a company at the end of a year. Not all the money received by a company is considered revenue. Money brought in through a business transaction is the revenue. In a company, revenue accounts are temporary accounts. Their balances are taken back to zero during the closure of a financial year. Expense is described as the spending borne by the company. It is necessary to understand that expense is not when a company buys an asset. Expense is the additional charges incurred with it, like repairing, security provision etc. Expenses are recorded monthly or yearly. These expenses make a company functional. Expenses can be of office requirements, recreational purpose, travels etc. expense accounts in a company are also temporary. Students looking for Matching of Revenues and Expenses Assignment Help shall find a detailed account of matching principles here.
Principles and Importance of Matching:
Basic principle: The matching principle underlines the fact that the revenue as and when recorded must be accompanied with the expenses related to it. Both the transactions though being undergone through different accounts must be put together on balance sheets in the same time frame. Matching of Revenues and Expenses Assignment Help shall discuss in details, the areas where this principle applies itself in a company.
1. Wages and bonuses: Employee salary and the bonuses given to them are paid to them in the following month of their services. So, the expense of company in form of their salaries should be mentioned with the revenue received by them. This goes hand in hand.
2. Commission charges: The sales executives bring in business for the company. They receive some percentage of this revenue which the company incurs as expense. The expense should be recorded with the revenue it brings in during a month or year.
3. Depreciations: In case of acquiring of assets, its maintenance costs are included under depreciation expenses whilst the services rendered by the assets go under the revenue column.
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Students looking for Matching of Revenues and Expenses Assignment Help shall also find importance of matching principle here.
• It maintains a balance and a kind of consistency in the financial statements of a company.
• The time of expenses and revenue recorded being crucial, matching makes sure that they go hand in hand.
• In case of fixed assets; during its useful life time, the depreciation expenses are balanced out with the incomes that come in with it. It proves beneficial in a long term business.
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Clients looking for Matching of Revenues and Expenses Assignment Help can expect the following pros and traits:
• Notes on all topics related to revenues and expenses are available.
• Effective description of revenue and expense concepts.
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