The reduction in the ability of a fixed asset to provide service over time is called:
A) deferral recognition.
B) depreciation.
C) consolidation.
D) accumulation.

Question

Quizplus · Accepted Answer

Depreciation is the systematic allocation of the cost of a fixed asset to expense over its useful life. It reflects the reduction in the asset's value or usefulness due to wear and tear, obsolescence, or other factors. Deferral recognition refers to the postponement of recognizing revenue or expenses until a later period. Consolidation refers to the combination of financial statements of two or more companies into a single set of statements. Accumulation refers to the gradual increase or buildup of something over time.

The Reduction in the Ability of a Fixed Asset to Provide