Question

Which of the principles below does Val follow when she reviews her records to make sure that recorded accounting events correspond to the actual costs?

• Time period principle

• Measurement principle

• Full disclosure principle

• Matching principle

Answer 1

Time period principle

This accounting principle states that the business should report its financial data in the form of financial statements related to a specific time period. These periods can be monthly, quarterly, semi-annually, annually or any other period based on the business policies or as prescribed by the applicable laws.

Measurement Principle

This principle states that the accounting events should correspond to the actual costs.

Full disclosure principle

This principle states that the all the businesses should report all their financial statements and other related information to the users of the financial information.

Matching principle

This principle states that a company to report an expense on its income statement in the period in which the related revenues are earned. The matching principle is associated with the accrual basis of accounting and adjusting entries.

Hence, the correct option is Measurement principle.