On April 1, 2013, nPropel Corporation paid $48,000 cash for equipment that will be used in business operations. The equipment will be used for four years. nPropel records depreciation expense of $48,000 for the calendar year ending December 31, 2013. Which accounting principle has been violated?

Question

Quizplus · Accepted Answer

The expense recognition principle, also known as the matching principle, has been violated because the entire cost of the equipment was expensed in one year instead of being allocated over its useful life of four years.

On April 1, 2013, NPropel Corporation Paid $48,000 Cash for Equipment