Recording depreciation each period is an application of the expense recognition principle.

Question

Quizplus · Accepted Answer

The expense recognition principle states that expenses should be recognized in the period in which the related revenue is recognized. Depreciation is an expense that is recognized over the useful life of the asset, so recording depreciation each period is a way of recognizing the expense in the period in which the related revenue is earned. Therefore, it is an application of the expense recognition principle.

Recording Depreciation Each Period Is an Application of the Expense