Which of the following is true of depreciation accounting?
A) It is not a matter of valuation.
B) It is part of the matching of revenues and expenses.
C) It retains funds by reducing income taxes and dividends.
D) All of these answers are correct.

Question

Quizplus · Accepted Answer

Depreciation accounting is used to allocate the cost of a long-term asset over its useful life. This helps in matching the expenses incurred in using the asset with the revenues generated from it, which is necessary for accurate financial reporting. As a non-cash expense, depreciation reduces the taxable income of a company, which can be used to retain funds for future purposes. Therefore, all the given options are correct.

Which of the Following Is True of Depreciation Accounting