Which statement best describes the proper accounting treatment for long-term assets classified as property,plant,and equipment?
A)Record them as assets and then depreciate them over an estimated useful life.
B)Record them as expenses when purchased using the cost principle.
C)Record them as assets and adjust them to market value each accounting period using the straight-line method.
D)Record them as revenues and expenses using the matching principle.

Question

Quizplus · Accepted Answer

Long-term assets classified as property, plant, and equipment should be recorded as assets on the balance sheet and then depreciated over their estimated useful life to allocate the cost of the asset over its useful life. This is in accordance with the matching principle, which requires that expenses be recognized in the same period as the revenues they help to generate. Option B is incorrect because recording them as expenses would not reflect their usefulness over multiple accounting periods. Option C is incorrect because adjusting the assets to market value each period is not necessary or practical, as the purpose of depreciation is to allocate the cost of the asset over its useful life. Option D is incorrect because property, plant, and equipment are not revenue or expense items, but are instead assets used to generate revenue over multiple accounting periods.

Which Statement Best Describes the Proper Accounting Treatment for Long-Term