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

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Depreciation is the systematic allocation of the cost of a fixed asset over its useful life. Recording depreciation as an expense each period is an application of the expense recognition principle, which states that expenses should be recognized when they are incurred to generate revenue, regardless of when the payment is made. By recognizing depreciation as an expense each period, the company is matching the cost of the asset with the revenue it generates over its useful life.

Recording Depreciation Each Period Is an Application of the Expense