Funds budgeted for a specific fiscal year must be expensed in that fiscal year. Services must be rendered and goods must be received by August 31. The Business Office will monitor the total future travel costs being expensed in the current fiscal year. If the aggregate cost is significant, a journal entry will be posted to move the total amount from expense to prepaid expense for financial reporting purposes. This journal entry will be reversed in the subsequent fiscal year, thereby expensing the costs in the subsequent fiscal year. The matching principle states that when you recognize revenue, you should match related expenses with the revenue. The accrual accounting method, which is the method used by the college, is based on this principle, as it records financial transactions as they occur, rather than when cash changes hands.