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| 1. |
How does the matching concept apply to depreciation? |
| Answer» Solution :According to matching concept, all costs which are incurred in an ACCCOUNTING period should be charged against the revenue of that period. Hence DEPRECIATION of current year is charged against the current years revenue. In other words, full cost of the asset is not treated as an expense in the year of its purchase itself RATHER it is spread over its USEFUL life. | |