The purpose of depreciation is to ________.
A) establish the current replacement cost of a fixed asset
B) accumulate funds to replace a fixed asset
C) set aside cash to replace a fixed asset
D) allocate the original cost of a fixed asset to the periods that benefit from the use of the fixed asset

Question

Quizplus · Accepted Answer

Depreciation is the process of allocating the original cost of a fixed asset to the periods that benefit from the use of the fixed asset. It is not used to establish current replacement cost, accumulate funds or set aside cash for replacement.

The Purpose of Depreciation Is to ________