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Preparing CFS-Direct Method

The underlyin...

Question

The underlying accounting principle(s) necessitating amortisation of intangible asset(s) is / are ________________.

A

Cost concept

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B

Realisation concept

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C

Matching concept

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D

Both (a) and (c)

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E

Both (b) and (c)

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Solution

The correct option is B Matching concept
Amortization of intangible assets means reducing the value of the asset in a systematic manner and charging that value to the revenue of that year.
The matching Concept suggests for amortization or depreciation of the assets.
Matching Concept states that all expenses matched with the revenue of that period should only be taken into consideration

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