Which one of the following items is not a consideration when recording periodic depreciation expense on plant assets?
A) Salvage value
B) Estimated useful life
C) Cash needed to replace the plant asset
D) Cost

Question

Quizplus · Accepted Answer

Cash needed to replace the plant asset is not a consideration when recording periodic depreciation expense on plant assets. Depreciation expense is recorded to allocate the cost of the plant asset over its estimated useful life, taking into consideration factors such as its cost, estimated useful life, and salvage value. The cash needed to replace the plant asset would only come into consideration when the plant asset needs to be replaced, not when recording its periodic depreciation expense.

Which One of the Following Items Is Not a Consideration