How do adjustments relate to the matching principle?

Adjustments are essential for adhering to the matching principle, which dictates that expenses should be recognized in the same accounting period as the revenues they help generate. This principle ensures that financial statements accurately reflect a company's performance during a specific time frame by aligning related revenues and expenses.

By making adjustments, such as recognizing accrued expenses or deferring revenue, businesses can ensure that all expenditures incurred in earning revenues are accounted for in the same reporting period. This results in a more accurate portrayal of financial health and operational performance, allowing stakeholders to analyze the true profitability of the company during that period.

In contrast, other options lack relevance to the fundamental principle of matching revenues and expenses and do not contribute to the accurate financial representation required for sound accounting practices.