How is the matching principle related to the recording of depreciation on tangible operational assets?
A) The matching principle requires a company to use the same depreciation.
B) Once a depreciation method is adopted for a particular asset, the owner must continue to use the same method.
C) The accountant who calculates the depreciation may assume that the company will continue in business at least as long as the estimated useful life of the asset.
D) A portion of the cost of the asset should be allocated as an expense for the periods in which the asset helps the business to earn revenue.

Question

Quizplus · Accepted Answer

The matching principle in accounting dictates that expenses should be recorded in the same period as the revenues they help to generate. Depreciation is the process of allocating the cost of a tangible asset over its useful life. By recording depreciation expense for an asset, a company matches the cost of the asset with the revenues it helps to produce over the asset's useful life, adhering to the matching principle.

How Is the Matching Principle Related to the Recording of Depreciation