Which of the following principles best describes the conceptual rationale for the methods of matching depreciation expense with revenues?
A) Associating cause and effect
B) Systematic and rational allocation
C) Immediate recognition
D) Partial recognition

Question

Quizplus · Accepted Answer

The matching principle requires that expenses be matched to the revenues they help to generate. This is accomplished through systematic and rational allocation of the cost of the asset over its useful life. By doing so, the matching principle ensures that expenses are recognized in the same period as the related revenues, which allows for accurate determination of income or loss.

Which of the Following Principles Best Describes the Conceptual Rationale