Kostner Financial Services Inc.purchased computers that are to be used in its consultancy services.As per the matching principle,the related account that should appear on the income statement for the year ended December 31,2014 is ________.
A)Depreciation Expense
B)Service Revenue
C)Accumulated Depreciation
D)Equipment Expense

Question

Quizplus · Accepted Answer

The matching principle states that expenses should be matched with the revenue they help to generate. Since the computers are being used to provide consultancy services, the cost of the computers should be allocated over their useful lives as Depreciation Expense on the income statement.