What is the primary purpose of the systematic allocation principle ? What is the primary purpose of the systematic allocation principle?a) To allocate costs only when cash is paidb) To record all costs immediately as expensesc) To delay cost recognition indefinitelyd) To distribute costs evenly over the asset's useful life

The systematic allocation principle is a key accounting concept used to match costs with the periods…

Answered: What is the primary purpose of the…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter4: Income Measurement And Accrual Accounting

Section: Chapter Questions

Problem 4.3E

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The concept that states assets should be recorded at their original cost is known as the: a) Matching Principle b) Cost Principle c) Consistency Principle d) Revenue Recognition Principle
is used to spread the cost of an asset across its useful life rather than recognizing it all at once.
Match each of the terms below with its definition. 1. Sunk cost a. Additional costs incurred from a course of action 2. Out-of-pocket cost b. Additional revenue from a course of action 3. Opportunity cost c. A future outlay of cash 4. Incremental cost d. Potential benefit lost from taking a course of action 5. Incremental revenue e. A cost that arises from a past decision and cannot be changed
The historical cost principle requires that assets be reported at their: a) Market value b) Replacement cost c) Fair value d) Original cost
Managing current assets involves a trade-off between two types of costs. These costs are: Group of answer choices cash-out costs and stock-out costs. shortage costs and cash-out costs. carrying costs and shortage costs. carrying costs and opportunity costs.
Give
General accounting
Why are inventories valued at the lower-of-cost-or-netrealizable value (LCNRV)? What are the argumentsagainst the use of the LCNRV method of valuing inventories?
TRUE OR FALSE The principle of historical cost states that acquired assets should be recorded at their actual cost and not at what management thinks they are worth as at reporting date.
Why should the total costs of the machine be viewed as an asset and allocated against the future revenue that the machine will generate?
Which of the following statement is correct for relevant costs? a.It is avoidable, future and measured by cash b.It is avoidable, future and measured by profit c.It is unavoidable, future and measured by cash d.It is unavoidable, future and measured by profit

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What is the primary purpose of the systematic allocation principle? a) To allocate costs only when cash is paid b) To record all costs immediately as expenses c) To delay cost recognition indefinitely d) To distribute costs evenly over the asset's useful life