Accounting for IGCSE & O level - Accounting Procedures (Section 6 - No. 38)
Which of the following best describes the matching principle as it relates to depreciation?
Depreciation expense matches the cost of the asset with revenue generated.
Depreciation expense is matched to the current year's depreciation schedule.
Depreciation expense must be matched with all other operating expenses.
Depreciation expense is the same for all assets.
Explanation
The matching principle requires expenses to be recognized in the period when the revenue they helped generate is earned.
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