Which of the following serves as the justification for the periodic recording of amortization expense?
A)Association of efforts (expense) with accomplishments (revenue)
B)Systematic and rational allocation of cost over the periods benefited
C)Immediate recognition of an expense
D)Minimization of income tax liability

Question

Quizplus · Accepted Answer

The periodic recording of amortization expense is justified by the systematic and rational allocation of cost over the periods benefited. This helps to match the expense with revenue earned during the corresponding period, as well as to accurately reflect the asset's decreasing value over time. Immediate recognition of an expense and minimization of income tax liability are not justifications for amortization. Association of efforts (expense) with accomplishments (revenue) is a broader concept that applies to matching all expenses with the revenue they generate, not just amortization.

Which of the Following Serves as the Justification for the Periodic