Q.Distinguish between the Matching Concept and the Realisation Concept, using the example of a sale made in March 2026 but paid for in April 2026 (accounting year ends 31st March).

These two concepts are often confused because both deal with timing, but one is about revenue and the other is about matching expenses to that revenue. …

The Realisation Concept decides when revenue itself is recognised: revenue is recorded when a sale is legally complete — when goods are delivered/title passes to the buyer — not when the order is placed or when cash is eventually received. In the example, the sale made in March 2026 is realised (and recorded as revenue) in the year ending 31st March 2026, even though the cash comes in only in April 2026 (the next year).

The Matching Concept then decides which expenses are set against that revenue: all expenses incurred in earning this March 2026 revenue — the cost of the goods sold, any selling commission relating to this sale, etc. — must be charged in the same year ending 31st March 2026, regardless of when those expenses were actually paid in cash. If, say, the salesperson's commission on this sale is paid only in April 2026, it must still be treated as an outstanding expense of the year ended 31st March 2026 so that it is matched against the revenue it helped earn. …

Treating the two concepts as the same thing — Realisation is exclusively about revenue recognition timing, Matching is exclusively about align …