As a company records depreciation expense for a period of time, cash is accumulated to replace fixed assets as they wear out.

Name: As a company records depreciation expense for a period of time, cash is accumulated to replace fixed assets as they wear out.
Brand: Quizplus
Rating: 4.8 (37 reviews)

Question

Quizplus · Accepted Answer

Depreciation expense is an accounting method to allocate the cost of a tangible asset over its useful life. It does not involve the actual accumulation of cash; rather, it reduces the book value of the asset and the earnings for the period.

As a Company Records Depreciation Expense for a Period of Time