The matching principle is an accounting concept that requires expenses to be recorded in the same period as the revenues they help generate. This ensures that financial statements accurately reflect a company's performance by aligning costs with the income they produce. For example, if a business sells a product in January, the costs associated with producing that product should also be recorded in January. This principle is essential for maintaining the integrity of financial reporting and is a key component of the Generally Accepted Accounting Principles (GAAP). By adhering to the matching principle, companies can provide a clearer picture of their profitability and financial health over time.