Depreciation, Provision and Reserves: Concept of Matching Principle

The compilation of these Accountancy Notes makes students exam preparation simpler and organised.

Depreciation, Provision, and Reserves

One of the main principles of accounting is the Matching Principle. It states that an income or revenue must be recognized in the same period as its matching expenses. Sometimes though the expense or revenue is not only confined to one accounting year. And so comes the concept of depreciation and provisions and reserves. Let us take a look.