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Basic Question 0 of 11
The matching principle is best demonstrated by ______.
B. the equation A = L + OE
C. allocating the cost of an asset to expense over the periods during which benefits are derived from ownership of the asset
D. offsetting the cash receipts of the period with the cash payments made during the period
A. using debits to record decreases in owner's equity and credits to record increases
B. the equation A = L + OE
C. allocating the cost of an asset to expense over the periods during which benefits are derived from ownership of the asset
D. offsetting the cash receipts of the period with the cash payments made during the period
User Contributed Comments 4
| User | Comment |
|---|---|
| Naufil2004 | Why is choice B incorrect? |
| Gina | because the matching principle is about identifying expenses, measuring them, and matching them against the revenues earned in the same period, ie it's an allocation issue. |
| myanmar | isn' C depreciation? |
| guna | with one exception, C could be depreciation, if it mentions economic useful life instead of ownership of the asset. |
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Learning Outcome Statements
describe motivations that might cause management to issue financial reports that are not high quality and conditions that are conducive to issuing low-quality, or even fraudulent, financial reports
describe mechanisms that discipline financial reporting quality and the potential limitations of those mechanisms
CFA® 2025 Level I Curriculum, Volume 3, Module 10.