Harvard Financial Services purchased computers that are to be used in its consultancy services.Based on the matching principle,what account,other than Computers,should appear on the balance sheet as of December 31,2016?
A)Depreciation Expense
B)Service Revenue
C)Accumulated Depreciation
D)Equipment Expense

Question

Quizplus · Accepted Answer

According to the matching principle, the cost of the computers should be matched with the revenue they generate over their useful life. This means that the cost of the computers should be recognized as an expense over time through depreciation. The accumulated depreciation account is used to record the total of all depreciation expense recognized to date. Therefore, option C) Accumulated Depreciation is the correct choice as it reflects the decreasing value of the asset as it is used over time. None of the other options are relevant in this situation, as there is no mention of equipment expense, service revenue or other accounts related to the acquisition of the computers.

Harvard Financial Services Purchased Computers That Are to Be Used