Which of the Following Is NOT a Good Example of the Matching

question 62

Multiple Choice

Which of the following is NOT a good example of the matching principle?

• A) A machine that produces certain goods is depreciated over its useful life. The depreciation expense is matched with the proceeds from the sale of those goods.
• B) The entire amount of a two-year insurance premium is expensed in the first year.
• C) An uncollectible receivable is written off in the year that the sale was made.
• D) Recognition of revenue for which associated expenses cannot yet be determined is delayed until such determination can be made.

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Definitions:

Profitability Order

This term does not refer to a specific accounting or financial metric but generally could mean prioritizing products, services, or projects based on their profitability.

Current Profitability

The measure of a company's current profit levels, often assessed through metrics like net income or operating profit.

Variable Costs

Expenses that vary directly with the amount of output or sales.

Fixed Manufacturing Overhead

Regular, unchanged costs incurred during the manufacturing process, regardless of production volume, such as salaries of permanent staff and rent.