Which of the following statements is true regarding depreciation?
A)Depreciation is a valuation concept; that allocates cost to reflect the actual change in the value of the asset.
B)Depreciation allocates the cost of a long-lived asset to the accounting periods over which it is used.
C)Depreciation expense will typically will be shown on the statement of financial position.
D)Accumulated depreciation has a normal debit balance.

Question

Quizplus · Accepted Answer

Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life to match revenue with expenses. It does not attempt to reflect actual change in value (eliminating A), is shown on the income statement rather than the statement of financial position (eliminating C), and accumulated depreciation has a normal credit balance, not a debit balance (eliminating D).

Which of the Following Statements Is True Regarding Depreciation