Depreciation is the process of allocating the cost of a plant asset over its service life in
A) an equal and equitable manner.
B) an accelerated and accurate manner.
C) a systematic and rational manner.
D) a conservative market-based manner.

Question

Quizplus · Accepted Answer

Depreciation is the process of allocating the cost of a plant asset over its service life in a systematic and rational manner to reflect the asset's decline in value over time. This is typically done through methods such as straight-line, declining balance, or units of production. Option A is incorrect because not all assets may have an equal and equitable allocation method. Option B is incorrect because not all assets may be accurately depreciated at an accelerated rate. Option D is incorrect because depreciation is not based on market values but rather the useful life and salvage value of the asset.

Depreciation Is the Process of Allocating the Cost of a Plant