The basic purpose of the matching principle is to allocate the cost of an asset to expense over the years in which the asset contributes to revenue.Current accounting practice does not strictly apply this principle to expenditures for:
A)Natural resources.
B)Research and development.
C)Trademarks.
D)Equipment.

Question

Quizplus · Accepted Answer

Expenditures for research and development are not subject to strict application of the matching principle because their future economic benefits are uncertain and difficult to estimate. Therefore, they are generally expensed immediately rather than capitalized and amortized over multiple years.

The Basic Purpose of the Matching Principle Is to Allocate