Accounting for IGCSE & O level - Accounting Procedures (Section 19 - No. 42)
What is the key concept when considering the accounting treatment for disposal of an asset?
To calculate the market value.
To accurately match the asset's expense to its generated revenue.
To comply with tax regulations only.
To maintain the asset on the company's books.
Explanation
The matching principle is at the heart of depreciation and disposal accounting. The cost of using an asset is systematically allocated to the periods benefited by the asset, matching revenues and expenses.
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