A corporation made the following entries: $\begin{array}{lll}
\text {A) Prepaid insurance }&900\
\text { Cash}&&900\
\text {B) Depreciation expense }&10,000\
\text {Accumulated depreciation }&&10,000\
\text {C) Wages payable }&3,000\
\text {Cash }&&3,000\
\text { D) Inventory of Merchandise}&4,000\
\text { Accounts payable}&&4,000\
\end{array}$ Which entry must have been made as a direct result of the matching principle?

Question

A corporation made the following entries: $\begin{array}{lll}
\text {A) Prepaid insurance }&900\
\text { Cash}&&900\
\text {B) Depreciation expense  }&10,000\
\text {Accumulated depreciation }&&10,000\
\text {C)  Wages payable }&3,000\
\text {Cash }&&3,000\
\text { D) Inventory of Merchandise}&4,000\
\text { Accounts payable}&&4,000\
\end{array}$ Which entry must have been made as a direct result of the matching principle?

Quizplus · Accepted Answer

Depreciation expense is an expense that is recognized over the useful life of an asset. It is a direct result of the matching principle, which states that expenses should be recognized in the same period as the revenues they generate.

A Corporation Made the Following Entries Which Entry Must Have Been Made as a Direct Result