Which accounting principle is most closely associated with matching revenues to expenses?

The principle most closely associated with matching revenues to expenses is the accrual basis principle. This principle emphasizes that revenues and expenses should be recorded when they are earned or incurred, rather than when cash is received or paid. This means that businesses must recognize revenue in the period in which it is earned and match the related expenses to that revenue in the same period, allowing for a more accurate representation of a company's financial performance.

For instance, if a company provides services in December but doesn’t receive payment until January, under the accrual basis principle, the revenue would still be recognized in December, the same period in which the services were rendered. Corresponding expenses that were incurred to generate that revenue would also be recorded in December, aligning both revenue and expenses correctly for that financial period.

This principle facilitates better financial analysis and decision-making since it reflects the actual economic activities of the business rather than just the movements of cash, which might misrepresent the company's profitability and financial position over time.