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Matching Principle
Definition of 'Matching Principle'
The maturity structure of debt matches the maturity of projects or assets held by the firm.
Short-term assets are financed by short-term debt and long-term assets are financed by long-term debt.
In accounting terms, this means that revenues associated with expenses within a given period shoudl be reported in that same period.
Matching the revenue and expenses means that it is easier to assess the profit or loss of a particular activity.
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