Which of the following does not properly describe the depreciation process?
A)It is an allocation process.
B)It is consistent with the matching principle.
C)It involves the use of estimates.
D)It attempts to determine an asset's market value.

Question

Quizplus · Accepted Answer

Depreciation attempts to allocate the cost of an asset over its useful life and is consistent with the matching principle. It involves the use of estimates to determine the asset's useful life and salvage value, but it does not attempt to determine an asset's market value. That is the role of other valuation methods, such as appraisals or market comparisons.

Which of the Following Does Not Properly Describe the Depreciation