Which of the Following Accounting Principles Requires Depreciation

question 117

Multiple Choice

Which of the following accounting principles requires depreciation?

• A) The revenue recognition principle
• B) The matching principle
• C) The reliability principle
• D) The entity concept

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Definitions:

Treasury Stock

Stocks that the issuing entity initially distributed and then bought back, decreasing the number of shares available for trade on the open market.

Par Value

The face or nominal value of a bond, stock share, or coupon as specified on a certificate or instrument.

Stock Dividend

A payment made by a corporation to its shareholders in the form of additional shares, rather than cash, reflecting the company's intention to reinvest profits.

Retained Earnings

Profits that a company keeps or reinvests for expansion or debt payment, rather than distributing to shareholders as dividends.