how does matching principle apply to depreciation
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Answer:
Explanation:
The expense is recognized throughout an asset's useful life. The calculation of depreciation expense follows the matching principle, which requires that revenues earned in an accounting period be matched with related expenses.
The answer is shown below:
Explanation:
The matching principle said that when the revenue is earned in the same period the expenses should be incurred. The both items should be reported in the income statement in the same period itself
Depreciation is an expense indicating a decline in the value of the fixed assets due to tear and wear, obsolescence, use, time period, etc. It's shown on the income statement debit side. It should be reported to the useful life of an asset.
The principle aims to balance expenditure with income in the event of depreciation because expenditure applies to depreciation charges for its useful life and the revenue is the asset used in the business to generate the income
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What is matching principle
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The accounting matching principle dictates that we:
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