Definition
The accounting concept that expenses should be recorded in the same period as the revenues they helped generate, because timing matters. It's why you can't expense the entire marketing budget in January even though that's when you paid for it.
Example Usage
Following the matching principle, we capitalize the software development costs and amortize them over the product's useful life rather than expensing everything immediately.
Origin
Fundamental accounting principle codified in early 20th century accounting standards
Fun Fact
The matching principle is theoretically beautiful but practically messy—deciding which expenses match which revenues is where creative accounting thrives.
Source: Generally Accepted Accounting Principles (GAAP)
Related Terms
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