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welcome to introduction to accounting preparing for users perspective deferred expenses cash is paid before the expenses recognized if you recall from the accrual accounting video I introduced the matching principle the matching principle effectively says that you should recognize expenses in the same accounting period as the revenues that they helped generate imagine this here represents an accounting period lets say it represents a year what we should do is when we incur revenues such as sales revenues we should also recognize the related expenses that help to generate those sales revenues for example the cost of the goods sold the wages expense the utilities expense and the advertising expense all of these are cost that we incurred that helped us to generate these revenues since weve received the benefit of these costs we need to expense them so that the revenues and expenses are in the same accounting period consulting revenues some related expenses might be salary expense travel