Which accounting principle requires that expenses be matched with revenue?

The matching principle is fundamental in accounting as it requires that expenses be recognized in the same period as the revenues they help generate. This principle ensures that a company's financial statements accurately reflect its profitability during a specific time frame. By matching expenses with revenues, accountants can provide a clearer picture of a company's financial performance, avoiding situations where profits appear larger or smaller than they actually are due to misaligned reporting of related transactions.

In essence, the matching principle helps to ensure that financial statements are aligned with the accrual basis of accounting, which recognizes revenues when earned and expenses when incurred, regardless of when cash changes hands. This is key to producing financial statements that offer insight into the operational efficiency and profitability of a business, thereby aiding stakeholders in making informed decisions.