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      Question

      Depreciation is charged as per which accounting

      principle?
      A Prudence Correct Answer Incorrect Answer
      B Going Concern Correct Answer Incorrect Answer
      C Consistency Correct Answer Incorrect Answer
      D Matching Correct Answer Incorrect Answer
      E Single entry system Correct Answer Incorrect Answer

      Solution

      The Matching Principle  in accounting requires that expenses be recorded in the same accounting period as the revenues they helped generate, not necessarily when cash changes hands, to show true profitability. Depreciation is the value which is written off out of the wear and tear of a Non-Current Asset. Since the asset is used over the useful life of the asset, therefore, the revenues generated should be matched with the expenses incurred over the useful life of that asset. As such, depreciation is charged based on the matching principle.

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