The Periodic Expense Created by Allocating the Cost of Plant

question 118

Multiple Choice

The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used, representing the expense of using the assets, is called:

• A) Accumulated depreciation.
• B) A contra account.
• C) The matching principle.
• D) Depreciation expense.
• E) An accrued account.

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Definitions:

Capital Account

An account showing the net worth of a business at a specific point in time, comprised of the owner's equity, investments, and retained earnings.

Correcting Entry

A journal entry made to amend a previously recorded incorrect transaction in the financial records.

Accounts Receivable

Refers to the money owed to a company by its customers for goods or services sold on credit.

Accounts Payable

Money owed by a company to its suppliers or creditors for goods or services received but not yet paid for.