When the future benefits of existing assets are used up in the ordinary course of business:
A)an expense is recorded.
B)a loss is recorded.
C)a credit to a liability is recorded.
D)a debit to assets is recorded.

Question

Quizplus · Accepted Answer

When the future benefits of existing assets are used up in the ordinary course of business, an expense is recorded in order to reflect the decrease in the economic value of the asset. This is in accordance with the matching principle of accounting, which requires expenses to be recognized in the same period in which the related revenue is recognized.

When the Future Benefits of Existing Assets Are Used Up