Depreciation is charged as per which accounting principle?

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.