How Is the Matching Principle Related to the Recording of Depreciation

question 10

Multiple Choice

How is the matching principle related to the recording of depreciation on tangible operational assets?

• A)The matching principle requires a company to use the same depreciation.
• B)Once a particular depreciation method is adopted for a particular asset,the owner must continue to use the same method.
• C)The accountant who calculates the depreciation may assume that the company will continue in business as long as the estimated useful life of the asset.
• D)A portion of the cost of the asset should be allocated as an expense for the periods in which the asset helps the business to earn revenue.

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Definitions:

Purchase Decision

The process and outcome of making a choice to buy a product or service after considering various factors and alternatives.

Award Contract

The act of formally selecting a vendor or supplier to provide goods or services through a contractual agreement after a bidding process.

Postpurchase Evaluation

The process by which consumers assess their satisfaction with a product after they have bought and used it.

Derived Demand

The demand for a product or service that results from the demand for another product or service it is used to produce.