How is depreciation recorded according to GAAP business?
A)As a "fair" presentation of results for the period.
B)As a capitalized as asset on balance sheet,not as an expense on income statement.
C)As an expense on income statement based on original cost,and deducted from asset on balance sheet.
D)All of the above.
E)None of the above.

Question

Quizplus · Accepted Answer

According to GAAP business, depreciation is recorded as an expense on the income statement based on the original cost and is deducted from the asset on the balance sheet. This is known as the straight-line method of depreciation. Choice A is incorrect because "fair" presentation does not specifically refer to depreciation accounting. Choice B is incorrect because depreciation should be recorded as an expense, not capitalized as an asset. Choices D and E are incorrect for the same reasons as A and B.

How Is Depreciation Recorded According to GAAP Business