Expenses are expenses in a broad sense, including various expenses and losses. Income-expense ratio should include the following three ways:

1. Direct matching: it is to directly match the expenses directly related to a specific income with its corresponding income, and determine the profit matching method. For example, direct materials and direct labor are directly included in the cost of finished products, and the sales cost is directly transferred to the realized sales income.

2. Indirect matching: allocate the expenses consumed by several objects to each specific object according to a certain proportion or coefficient, so as to associate it with the corresponding financial results. For example, manufacturing costs are allocated through indirect matching.

3. Period matching: For expenses that have no causal relationship with any specific product or service, because they are only related to a certain period, these expenses are regarded as related to all the income realized in that period and need to be matched with the income in that period. These expenses include management expenses, sales expenses, financial expenses and non-operating expenses.

Extended data:

Precautions:

1. The matching principle is based on accrual basis, which works together with accrual basis to determine the current profit and loss, and is finally restricted by two preconditions: going concern and accounting staging.

2. The income is determined when it occurs, not when it is collected. The matching expense cost is the actual expense for obtaining the income, regardless of whether the expense has been paid in cash.

3. The accounting entity must calculate the income and expenses of each period according to the accrual basis, but not all expenses calculated according to the accrual basis are period expenses or product costs.

4. Only the expenses corresponding to the current income or product income determined according to the matching principle are the period expenses or product costs.

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