Question

Dynamic Services Company purchased computers that are to be used in its consulting services. Based on the matching​ principle, the related account that should appear on the income statement for the year ended December​ 31, 2018 is​ ________. A. Service Revenue B. Depreciation ExpensedashEquipment C. Equipment Expense D. Accumulated DepreciationdashEquipment

Answer 1

Answer:

B. Depreciation Expense - Equipment

Explanation:

As according to the matching principle all the revenues should be matched against some expense,

As for the asset called computer is purchased for its consulting services, which will generate revenue, as for that some expense has to be charged against such revenues.

For this the cost of asset is provided as a depreciation expense in income statement, as proportionate to the use of equipment in current year for generating consulting services.

Correct answer is:

B. Depreciation Expense - Equipment