Depreciation is:
A) the process of systematically and rationally allocating the cost of a fixed asset over its useful life.
B) an accumulation of funds to replace the related plant asset.
C) the difference between the replacement cost and salvage value of an asset.
D) the cash allocated each period to maintain a plant asset.

Question

Quizplus · Accepted Answer

Depreciation is the systematic and rational allocation of the cost of a fixed asset over its useful life, reflecting the consumption or expiration of its economic benefits. It is a non-cash expense that reduces the carrying value of the asset on the balance sheet over time.

Depreciation Is