The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used,representing the expense of using the assets,is called:
A)Accumulated depreciation
B)A contra account
C)The matching principle
D)Depreciation
E)An accrued account

Question

Quizplus · Accepted Answer

Depreciation represents the periodic expense of using plant and equipment and is created by allocating the cost of the assets to the periods in which they are used. Option A, accumulated depreciation, is the total amount of depreciation expense that has been recorded to date. Option B, a contra account, is an account that is offset against another account on the balance sheet. Option C, the matching principle, requires expenses to be recognized in the same period as the revenue they help to generate. Option E, an accrued account, is an account that records expenses or revenues that have been incurred but not yet recorded in the accounts.

The Periodic Expense Created by Allocating the Cost of Plant