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

Question

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

Quizplus · Accepted Answer

The matching principle requires that expenses be matched with the revenues they help to generate. Entry B, which records depreciation expense and its impact on accumulated depreciation, directly applies this principle by allocating the cost of a fixed asset over its useful life.

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