Author Question: In a control matrix P-1 stands for process number one. Indicate whether the statement is true or ... (Read 50 times)

yoroshambo · **on:** Jul 5, 2018

In a control matrix P-1 stands for process number one.
Indicate whether the statement is true or false

Question 2

Explain why certain long-term assets are depreciated, amortized, or depleted instead of remaining in the accounting records at cost until the time of disposal.

What will be an ideal response?

kusterl · **Reply #1 on:** Jul 5, 2018

Answer to Question 1

F

Answer to Question 2

The matching principle requires that efforts (expenses) be matched against accomplishments (revenues). A long-term asset helps a business generate revenue, for example by producing inventory that can be sold; and since the asset is consumed in the process, then the expenses related to the asset being used up must be matched against the revenues the asset helps to generate. In other words, the asset should be written off over a period that corresponds to its useful life. That is what depreciation, amortization, and depletion accomplish.