The Periodic Expense Created by Allocating the Cost of Plant

question 33

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) An accrued account.
• C) A contra account.
• D) Depreciation expense.
• E) The expense recognition (matching) principle.

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Definitions:

Cash Flows

The net amount of cash being transferred into and out of a business, essential for assessing its financial health.

Principle Due

refers to the outstanding balance of the principal amount of a loan or mortgage that needs to be paid.

Loan Terms

The conditions and agreements under which a loan will be made, including the interest rate, repayment schedule, and duration of the loan.

Growing Annuity

A series of escalating payments or receipts over a period, where each payment grows by a fixed percentage rate.