Which of the following is an application of the principle of rational and systematic allocation?
A) Amortization of intangible assets.
B) Sales commissions.
C) Research and development costs.
D) Officers' salaries.

Question

Quizplus · Accepted Answer

Amortization of intangible assets is an application of the principle of rational and systematic allocation because it allows the cost of an intangible asset to be spread out over its useful life rather than expensed all at once. This allocation ensures that the cost of the asset is recognized in the periods in which it provides economic benefits, resulting in more accurate financial reporting. Sales commissions, research and development costs, and officers' salaries are not necessarily examples of rational and systematic allocation.

Which of the Following Is an Application of the Principle