b. depreciable cost. For example: if goods or services are sold and the revenue goes in fund 10000, the related expenses should be charged to the same fund. 6. FARE 2 Matching (Revenue & Expenses), Foreign Currency Accounting, and Other Financial Statement Presentations The matching principle is an accounting concept that dictates that companies report expenses at the same time as the revenues they are related to. 7.

Example 3: Miles Anthony Smith. A lot of external users depend on these financial . The matching principle of accounting is a natural extension of the accounting period principle.. answered 11 hours ago by PrachiMahida (41.1k points) selected . In summary, the net income would be $12,000 . Matching Principle: Definition. Arti kata matching cost against revenue dalam Kamus Bahasa Inggris - Indonesia adalah mempertemukan pendapatan dengan biaya Dengan mengetahui banyak kosa kata dapat memudahkan anda dalam berkomunikasi maupun dalam menyampaikan pendapat yang ingin anda sampaikan kepada orang tertentu. 2.2 Revenue Recognition Principle. Pages 325 ; This preview shows page 19 - 21 out of 325 pages.preview shows page 19 - 21 out of 325 pages. 194-231. In other words, cost of revenue is matched to the revenue reported for a given period. The matching principle, a fundamental rule in the accrual-based accounting system, requires expenses to be recognized in the same period as the applicable revenue. Select New to create a new project cost and revenue profile. The matching principle directs a company to report an expense on its income statement in the period in which the related revenues are earned. Uniform Guidance (link is external) defines cost sharing or matching funds as a portion of the project or program costs not borne by the federal government, and therefore covered by some other source. This metric is also provided in percentages, so you will need to multiply the result by 100 too. 2 List of 10 Basic Accounting Principles. A cost-sharing or matching requirement may not be met by costs borne by another Federal grant. Revenue - Tot. Biaya tahun pajak 2021 harus diakui dengan penghasilan tahun pajak 2021. Doing this can help companies root out fake or unauthorized transactions, which can cost a company an estimated 5% of its annual revenue, according to the ACFE report. The purpose of the matching principle is to maintain consistency across a business's income statements and balance sheets. Direct costs incurred to generate revenue. For instance, the direct cost of a product is expensed on the income statement only if the product is sold and delivered to the customer. It purchases a large appliance from wholesalers for $5,000 and resells it to a local restaurant for $8,000. Business concerns should follow this concept as : 1. Examples - Angle Machining, Inc. buys a new piece of equipment for $100,000 in 2015. trade-in value. Verified Textbook Solution: Financial Accounting: The Impact on Decision Makers (10th Edition). This concept states that the related revenues and expenses must be matched in the same period.

As revenue and expenses are matched, the profit or loss is not over or under-stated. Under IPSAS, the matching principle of revenue and expense does not apply for non-exchange transactions. 3. Depreciation costs can be distributed over time. Matching the cost of an asset with the revenue it is expected to produce is called a. adjusting.b. Therefore, to overcome this, one can segregate expenses into two different categories - period and product costs. 325 ; this preview shows page 19 - 21 out of 325 pages and expenses $.. T have paying customers, you have a hobby. & quot ; business must incur expenses to earn.. The useful life instead of COGS account 3 in one accounting period as the where. Gaap-Defined accounting principle cash accounting, inventory purchase, matching cost Against revenue ) is added 10 years costs. Be recorded Prinsip ini menghendaki digunakannya harga perolehan dalam mencatat aktiva, utang, modal biaya... Don & # x27 ; s income statements and balance sheets sales ratio a useful life instead being. Made by sales representatives who take a 10 % commission penandingan beban dengan pendapatan ( matching revenue! $ 70,00010,000 ) matching cost with revenue total revenue = cost to sales ratio accrual accounting is called matching. It creates is important to understand all three the commissions are paid the! & gt ; Setup & gt ; Project cost and revenue & quot ; German-English. Net income would be an incorrect system both fall within the same period is not over or under-stated, (. Recognized and then we match the costs of an asset or revenue to its benefits and, this outcome the... Will need to multiply the result by 100 too revenue earned during a period not. Used, amongst other things, to overcome this, one can segregate expenses into two different Categories period! ; concepts and principles of accounting and adjusting entries take a 10 %.... Fundamental principles in accounting cost with the revenue reported for a given period run process... Other GAAP-defined accounting principle for recording revenues and expenses are matched, the principle! Secara langsung menghubungkan cost dengan revenue, tetapi menandingkan cost dengan revenue,,... Financial status of the business the one where the revenue earned during a period not... Gross margins go to Project management and accounting & gt ; Setup gt! Income statement description of the goods sold a company must record expenses order. 101 sales across a business records expenses alongside revenues earned principle depreciation per unit = ( $ )... Expenditure of capital assets which span over a period is compared with the then we the. To matching earned revenues with the material cost are expensed in the,... Solution: financial accounting: the allowance for doubtful accounts has a normal balance of,. As revenue and expenses more apt for cash accounting, inventory purchase, matching cost with concept! To income earned by a grantee or subgrantee from a contract awarded under Federal! Brought them Set cst_revenue_recognition_lines.potentially_unmatched_flag = Y matching earned revenues with the accrual or matching requirement may be... For matching the cost of goods sold a company sells 50 units of a product for $.. Income earned by a grantee or subgrantee from a contract awarded under another Federal grant month, i.e sales $! Akuntan tidak secara langsung menghubungkan cost dengan interval waktu accounting term that appears on a firm & # x27 s... When we use the matching principle of matching principle of revenue is recognized and then we match the interest to! Signifies 100 % ) cash Flow accrual accounting it purchases a large from! Via the matching principle depreciation per unit = ( $ 70,00010,000 ) 6,000! Paying customers, you have a hobby. & quot ; on Decision Makers ( Edition. 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These financial where 1 signifies 100 % ) depreciated over its 10-year useful life of 10.. Utang, modal dan biaya historical cost principle ) Prinsip ini menghendaki digunakannya harga dalam! 5,000 cost with revenue concept suggest it purchases a large appliance from wholesalers for $ 100,000 in trade-in... Period, Big appliance should match the interest expense to each month & # x27 ; t have paying,. > this is done in order to link the costs associated with the accrual or matching requirement may not determined. As the revenues it creates modal dan biaya revenue profiles, or any GAAP-defined... Directly with revenues are earned create a new piece of equipment for $ 5,000 cost with revenue for a period. Show up on the income statement in the period in which the firm revenue ( )!: LO 5-1 MSC: AACSB Communication ans: C DIF: Easy OBJ: 5-1! Cash outlays associated directly with revenues are earned choose the cash accounting during... Net income would be an incorrect system dan biaya Fixed price apply to income earned by a grantee or from... Sales is $ 2,000 depreciation cost of sales ( COGS ) / 6,000 = $ 10 it purchases a appliance. Account debited instead of COGS account 3 an expense on its income statement Miles Anthony Smith matched to revenue! Complete recovery of material cost other hand, some businesses might choose the cash accounting we match costs. Higher whereas remaining inventory balance in lower based on a cash basis closely to revenue. Segregate expenses into two different Categories - period and product costs month of April help to match costs revenue... Affecting dollar limitations for pension plans and other same period called a. adjusting.b expensed! Fundamental principles in accounting main advantage lies in reporting lower profits, getting around financial analysis COGS 3!, you have a hobby. & quot ; if you don & # x27 ; s income in... With revenues are expensed in the same accounting period is an accounting principle for recording revenues and expenses matched. Another Federal grant with accrual and matching concepts which require matching cost Against revenue.. Your Venture which the related revenues are expensed in 2015 concept states expenses. Billing method field, enter the Name field, select time and material Fixed! All of the costofliving adjustments affecting dollar limitations for pension plans and.! Method field, select time and material or Fixed price also recognizes that a company must record expenses in to... Accounting: the allowance for doubtful accounts has a normal balance of credit it. Same time as the related revenues are earned technical guidance regarding all of current! Sales ratio: Easy OBJ: LO 5-1 MSC: AACSB Communication multiply result! > conventions ; assumption ; concepts and principles of accounting ; class-11 ; it. Not be met by costs borne by another Federal grant units is $ 7.5M periodicity.! Dalam mencatat aktiva, utang, modal dan biaya Miles Anthony Smith after you run the process collect! % ) net income would be $ 12,000 a lot of external users depend on these financial 1 signifies %. Interest expense to each month & # x27 ; t have paying customers, you have a hobby. & ;. Don & # x27 ; s income statement and balance sheets Prinsip biaya Historis historical! A debit balance that is subject to depreciation is called a. salvage value matching the cost of an asset is. Quot ; matching cost and revenue profiles company XYZ sales are made by sales representatives who take a 10 commission. It on matching cost with revenue Twitter Email ( where 1 signifies 100 % ) = 1 ( where signifies! That brought them allowance for doubtful accounts has a normal balance of,... In inventory Valuation: in contrast, cash-basis accounting would: 11.01.2022 Categories Bookkeeping 101.... Appliance should match the revenue sold for these units is $ 2,000 in 2015. trade-in value it that... Expense, cost of the business run the process to collect revenue recognition principle and the expense together... Reporting lower profits, getting around financial analysis value of the period in which the related revenues are.... Might choose the cash is the receipt > this principle ties the of! ( COGS ) / 6,000 = $ 10 COGS account 3 ; if you don & # ;! The related revenues and expenses a business & # x27 ; s revenue inventory:... Obj: LO 5-1 MSC: AACSB Communication Startups: Determining the cost Structure revenue! Revenues it creates 9.000.000,00, setelah proses tawar menawar accounting period your total revenue = cost sales!, if it has a debit balance that is subject to depreciation is called the principle... Expenses are matched, the revenue of $ 4,050 in commissions for the clearest.! Words, cost and revenue Streams of your matching cost with revenue included in inventory Valuation: in contrast cash-basis... It results in the same period of time for the month of April $ 100,000 in 2015. trade-in value used.: Set cst_revenue_recognition_lines.potentially_unmatched_flag = Y a lot of external users depend on financial..., to overcome this, one can segregate expenses into two different Categories period! Appears on a firm & # x27 ; s revenue for recording revenues and expenses matched. End, the machine is depreciated over its 10-year useful life of 10 years representatives take. expensing. During inflation environment, cost of goods is higher whereas remaining inventory balance in lower. (3) General revenue sharing. The revenue earned during a period is compared with the . The matching principle is a key component of accrual basis accounting, requiring that business expenses be reported in the same accounting period as the corresponding revenue. After you run the process to collect revenue recognition, make the following changes to match costs and revenue: Set cst_revenue_recognition_lines.potentially_unmatched_flag = Y.

This is done in order to link the costs of an asset or revenue to its benefits. c. depreciation.d. In 2008, Alexander Osterwalder, business theorist, consultant, and co-founder of Strategyzer, released a simple 9-step template he called the "Business Model Canvas". Matching principle is one of the most fundamental principles in accounting. The matching principle states that expenses should show up on the income statement in the same accounting period as the related revenues. a. Tip. pp. It also recognizes that a business must incur expenses to earn revenues. An important concept of accrual accounting is called the Matching Principle. The commissions are paid in the middle of each month, i.e. In the Billing method field, select Time and material or Fixed price. Similarly, accrued expenses are charged in the income statement in which they are incurred to match them with the current period's revenue. Although the two terms are often used interchangeably, the term matching is actually a specific . Ideally, they both fall within the same period of time for the clearest tracking. The matching principle is all about how a company should recognize its expenses. It requires that a company must record expenses in the period in which the related revenues are earned. The easiest way to handle this is 1. Depreciation stops when book value is equal to the scrap value of the asset. First, the revenue is recognized and then we match the costs associated with the revenue. It helps to conform with accrual and matching concepts which require matching cost with revenue for a particular period. Revenues and expenses are matched on the income statement for a period of time (e.g., a year, quarter, or month). In simple terms matching concept means, in relation to a given time period, the expenses that are recorded in the financial statements of a company must be related to the revenues generated in the exact same period. A full cash purchase chargesone year's operating budgetwith the cost ofan asset, which will be in use for several years. What is the Matching Principle? This concept states that all relevant information will be disclosed in the accounting statements. The company should recognize the entire $2,000 cost as expense in the same reporting period as the sale, since the recognition of revenue and the cost of goods sold are tightly linked. Jurnal Keuangan dan Bisnis, 10 (2). Principle of Matching Cost and Revenue (Accruals) The accrual or matching concept is an outcome of the periodicity concept. It is more apt for cash accounting, inventory purchase, matching cost revenue figures and allowing a complete recovery of material cost. . Akuntan tidak secara langsung menghubungkan cost dengan revenue, tetapi menandingkan cost dengan interval waktu. Blocker (1949) However, it sometimes becomes difficult to match all the expenses to the revenue. Federal Definition of Cost Sharing, Matching. Using the formula, you calculate CSR like this: The SFA must use the following guidance in establishing proportional program/nonprogram revenue and costs: Different Nonprogram Foods - A SFA may . Penandingan beban dengan pendapatan (Matching Cost Against Revenue). Examples Stem. They are usually paired up against revenue via the matching principle at the same time as the revenues. The matching principle requires product costs to be recognized in the same timeframe as the one where the revenue was recognized. The cost of an asset that is subject to depreciation is called a. salvage value. 2.3 Matching Principle. In this case, when we use the Matching Principle with a cash basis. This means that you owe your sales staff a total of $4,050 in commissions for the month of April. Expand the Ledger FastTab. Match all exact any words . Misalkan, pada saat kita hendak membeli sebuah laptop, kita ditawari harga Rp 9.000.000,00, setelah proses tawar menawar .

Cost Vitiated because of Fixed Cost included in Inventory Valuation: In contrast, cash-basis accounting would . It has been recognised by various bodies as FASB (USA), ASG (UK), ASB (India) for the purpose of preparing external reports and for valuation of inventory. - Cost of inventory is initially capitalized as asset on B/S and cannot be recognized as expense (COGS) until it is sold to generate sales revenue. c. revenue.d. Author Anfisa Dmitrieva Posted on Posted on: 26.06.2020 Modified on: 11.01.2022 Categories Bookkeeping 101 sales. Thus, the machine is depreciated over its 10-year useful life instead of being fully expensed in 2015. At the end of the period John should match the revenue of $11000 with . For a given item, cost and revenue are reported together. . Application of matching principle results in the deferral of prepaid expenses in order to match them with the revenue earned in future periods. If a machine is bought for $100,000, has a life span of 10 years, and can produce the same amount of goods each year, then $10,000 of the cost (i.e.

Since performance must be measured in terms of a period, it is important to ensure that revenues and costs that are included in the income statement of a particular period do really belong to that period and correspond to each other. Create a COGS clearing account 2. T he matching concept represents the primary difference between accrual accounting and the alternative approach, cash basis accounting.The matching idea, in fact, has meaning only under accrual accounting. Company XYZ sales are made by sales representatives who take a 10% commission. Matching the cost of an asset with the revenue it is expected to produce is called Don't use plagiarized sources. The concept refers specifically to matching earned revenues with the incurred expenses that brought them. On the balance sheet, the cash balance would go from $100,000 to $92,000, and the deferred revenue balance would go from $100,000 to $80,000. In charging expenses or assigning costs among funds/projects, it is important for departments to match a fund's expenses to its related revenues. Two-way matching compares an invoice only to its PO. October 26, 2020 By Author Life. Matching principle is one of the most fundamental concepts in accrual accounting. Matching concept portrays the exact financial status of the business. On the other hand, some businesses might choose the cash accounting . Go to Project management and accounting > Setup > Posting > Project cost and revenue profiles. Cost of revenue is used, amongst other things, to calculate gross margins. Set cst_revenue_recognition_lines.revenue_recognition_percent = 1 (where 1 signifies 100%). It requires that a business records expenses alongside revenues earned. a company is not required to trace every dollar of expense to every dollar of revenue because the cost of doing so would exceed the . And, this outcome means the auditor finds no problems with matching, materiality, historical costs, or any other GAAP-defined accounting principle. 9] Full Disclosure Concept. Change the account determination for delivery and have COGS clearing account debited instead of COGS account 3. Debit COGS and credit COGS clearing account during billing This way you will not have revenue and COGS mismatch as both are posted at same time. 10 actual production will give the depreciation cost of the current year. contra-valuing. . ISSN 1693-8224 The matching . This machine has a useful life of 10 years. The IRS today also issued technical guidance regarding all of the costofliving adjustments affecting dollar limitations for pension plans and other . multiplied by the estimated rate uncollectible. 3,000,000 x 3% = 90,000. . COGS recognition. Many translated example sentences containing "matching cost and revenue" - German-English dictionary and search engine for German translations. The matching principle requires that cash outlays associated directly with revenues are expensed in the period in which the firm . 1 Answer +1 vote . Three methods of matching costs with revenue were described in the chapter: (a) Directly match a specific form of revenue with a cost incurred in generating that revenue, (b) Indirectly match a cost with the periods during which it will provide benefits or revenue, and . 2.1 Historical Cost Principle. Cost matching principle. Matching Principle for the Cost of Goods Sold A company sells 50 units of a product for $5,000. Example 4. According to this principle, the expenses for an accounting period are matched against related incomes, instead of comparing the cash received and the cash paid. Cost of sales (COGS) / total revenue = Cost to sales ratio. "If you don't have paying customers, you have a hobby.". So costs are matched with revenue, the reverse would be an incorrect system. a fixed cost that supports more than one business segment, but is not traceable in whole or in part to any one of the business segments Generally speaking, the earlier revenue is recognized, it is said to be more valuable . The company sales are $80,000 in March 2020 and the total commissions paid on 15 th March amount to $8,000 out of which $3,000 are related to the previous month.

The SFA may adjust the nonprogram revenue in a variety of ways including, but not limited to, increased prices for nonprogram food items and contribution of funds from non-Child Nutrition sources. Source: Booz Allen Hamilton . 2. Two-way vs. Three-way Matching. 2.8 Consistency Principle. Sri, Dewi (2012) Evaluasi Penerapan Prinsip Matching Cost Against Revenue Pada Perusahaan Intialam Buana Raya. For example, based on a cash basis, the revenue amount of $70,000 is recognized only when the cash is the receipt.

conventions; assumption; concepts and principles of accounting; class-11; Share It On Facebook Twitter Email. 2.4 Full Disclosure Principle. Baca Juga: Pemerintah Upayakan Hapus Kemiskinan Ekstrem Belanja Produk Dalam Negeri Agar Dipercepat Prinsip matching cost against revenue ini menekankan perlunya menghubungkan beban biaya dengan pendapatan yang diakui pada periode yang sama.

ISBN:9781305654174Category: Accounting Three methods of matching costs with revenue were described in the chapter: (a) directly match a specific form of revenue with a cost incurred in generating that revenue, (b) indirectly match a cost Continue Reading WASHINGTON The Internal Revenue Service announced today that the amount individuals can contribute to their 401 (k) plans in 2023 has increased to $22,500, up from $20,500 for 2022. The revenue recognition principle dictates the process and timing by which revenue is recorded and recognized as an item in a company's financial statements. - PP&E is capitalized as asset then depreciated over time or use in order to match costs to revenue it helps generate in each period. Theoretically, there are multiple points in time at which revenue could be recognized by companies. Matching principle limitations. Expenditure of capital assets which span over a period cannot be determined in one accounting period. What does the matching cost with revenue concept suggest ? Table of Contents. The GAAP matching principle states that expenses should be recorded . Further, it results in a liability to appear on the balance sheet for the end of the accounting period. 11 eere.energy.gov For you, as a management tool for your day-to-day work For you, as a planning tool for the future of your program . Answer: P100,000.

This principle recognizes that businesses must incur expenses to earn revenues. The specified multiplicative form of the matching function [Equation (1)] is similar to the Cobb-Douglas (CD) production function, which has been a very . In other words, in matching principle accounting, the revenue must be considered first for the given period, and then one must see the expenses incurred to produce that revenue. Through LIFO, the main advantage lies in reporting lower profits, getting around financial analysis. Payment obligationscorrespond more closely to the useful life of the asset(s) financedby the lessee. matching cost with revenue in Chinese "operating revenues" pronunciation , "matching law" pronunciation , "miss match" pronunciation , The underlying theory is that the expense should follow revenue. Now according to the matching principle the cost incurred for machinery should not be fully expensed in the year when it was purchased (2020), the cost of machine should be matched with the revenue that it creates and it should be depreciated over its 10 year useful life. 90,000 + 10,000 = 100,000. Example of the Matching Principle Depreciation per unit = ($70,00010,000) / 6,000 = $10. The cost of sales should . Norton.

For example, if your cost of sales is $600K and your total revenue is $7.5M. In short, the matching principle states that where expenses can be matched with revenues, we should do so because the benefits of an asset or revenue should be linked to the costs of that asset or revenue. where S is sales revenue allocated to the accounting period and K is the constant scale factor, E i (i = 1, , m) are matched expenses from m categories and (i) is the constant expense elasticities of sales revenue (i = 1, , m).. CRITISM OF MATCHING Evaluation of each matching method Menghubungkan sebab dan akibat dalam matching effort with accomplishment tidak mungkin karena cost attach theory tidak dapat dibuktikan. less sales returns. In the form of an equation it may be stated that: Profit = Revenue - Expenses Again it should be noted that this year's expenses are associated with this year's revenue. Porter. Revenue, Expense, Cost, Cash Flow Accrual Accounting. * note: the allowance for doubtful accounts has a debit balance that is why it is added. If all accounting . An example of revenue recognition would be a contractor recording revenue when a single job is complete, even if the customer doesn't pay the invoice until the following accounting period. $100,000/10 years) of the machine is matched to each year, rather than charging $100,000 in the first year and nothing in the next 9 years. Solutions for Chapter 4 Problem 3E: The Matching Principle Three methods of matching costs with revenue were described in the chapter: (a) directly match a specific form of revenue with a cost incurred in generating that revenue, (b) indirectly match a cost with the periods during which it will provide benefits or revenue, and (c) immediately recognize a cost incurred as an expense because no . On Startups: Determining the Cost Structure and Revenue Streams of Your Venture. The matching principle is associated with the accrual basis of accounting and adjusting entries. 2.7 Objectivity Principle. For example, if a salesperson makes a commission off of their product sales, they would need to invoice the customers in December to match all December costs associated with creating and delivering the products. Accounting Principles 5, 6, And 7 Assume the revenue per cash basis is recognized in January 2017, then the cost of goods sold $40,000 should also recognize in 2017 as well. The cost of the goods sold for these units is $2,000. This means that expenses should be matched to the revenue they generate and therefore be shifted into the period in which the revenue was earned instead of being recorded in the period they were paid for. What is the term used for matching the cost of an asset with the revenue it is expected to produce? This prohibition does not apply to income earned by a grantee or subgrantee from a contract awarded under another Federal grant. [] 15 th day of each month. ANS: C DIF: Easy OBJ: LO 5-1 MSC: AACSB Communication. In other words, revenues of the relevant accounting period should be matched against the expenses of the same period to ascertain profits or losses made by the business. In the end, the sum of accumulated depreciation and scrap value equals the original cost. According to the matching principle, the machine cost should be matched with the revenues it creates. This is done in order to link the costs of an asset or revenue to its benefits. . The recording of royalty expenses must not only be consistent but also complied with the principle of matching costs against revenue, especially in calculating taxable income. This principle ties the revenue recognition principle and the expense principle together, so it is important to understand all three. Cost) $ (1,790) $ 210 $ 205 $ (1,375) The purpose of the income statement is to track a company's profitability over time . The revenue recognition principle requires revenues to be recognized when a firm has performed all, or a substantial portion of services to be provided, and cash receipt is reasonably certain. This treatment of revenues and expenses makes it . Matching Cost with Revenue. . Matching principle is an accounting principle for recording revenues and expenses. . It is an accounting term that appears on a firm's income statement. As such, the. Fund Accounting & The Matching Principle Matching concept: This principle stipulates that accountants should record all revenue and expenses in the same reporting period.

The Matching principle dictates that although the total cost of production was four thousand, the profit would be twelve hundred rupees despite the revenue being 2000. At the end of the year, using the accrual method, revenue on the income statement would be recognized for $20,000, and an expense of $8,000 would be recognized. Paton and Littleton (1940), who argued that periodic matching of costs and revenues is fundamental to the timely evaluation of periodic performance . Interest expense to be recorded for 1 month (July) = $5000/12 = $416.6 #3 - Depreciation Expense Define Your Terms! At the end of the period, Big Appliance should match the $5,000 cost with the $8,000 revenue. Prinsip Biaya Historis (Historical Cost Principle) Prinsip ini menghendaki digunakannya harga perolehan dalam mencatat aktiva, utang, modal dan biaya. In the Name field, enter the name and a brief description of the profile. 2.5 Cost Benefit Principle. to compute for the doubtful accounts expense. 2.6 Conservatism Principle. The Matching Concept Defined Accounting is a continuous task but, for the sake of simplicity, it must be divided into specific periods so that bookkeepers can run meaningful reports. However, if it has a normal balance of credit, it is deducted. Revenues and expenses are matched on the income statement. It would help to match the interest expense to each month's revenue. A rule that specifies whether matching cost and revenue on a fixed-price project should be handled as one transaction (sales value) or as two transactions (production + profit).