Realization Principle

Revenue should be recorded when it is earned, regardless of when cash is received. This typically occurs when goods or services are provided to customers. For instance, if a service is performed in August but payment is received in September, the revenue is recorded in August when the service was completed​​.

Matching Principle

Expenses are recorded in the same period as the related revenue. This ensures that all costs incurred to generate that revenue are accurately reflected. For example, if salaries related to services performed in July are paid in August, the expense is recognized in July​​.