can you tell me how depreciation is related to the matching

can you tell me how depreciation is related to the matching principle?

Solution

Depreciation is the used up portion of the asset which is reported in the income statement. According to the matching principle, over the life the asset the cost of the asset should be allocated as depreciation expenses. This is done to match the revenue earned by using the assets in the business with its wear and tear as depreciation. In matching principal this way cost of the asset is matched with income earned by using the asset.