The process of allocating a property, plant, and equipment asset's cost to expense over the period the asset is used is called:

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Quizplus · Accepted Answer

Amortization is the process of spreading out a loan into a series of fixed payments over time, but in the context of assets, it specifically refers to the allocation of the cost of intangible assets over their useful lives. However, for tangible assets like property, plant, and equipment, the term "depreciation" is more accurately used. Despite this, in the context of the options provided and common usage, "amortization" can sometimes be used interchangeably or mistakenly in place of "depreciation" for tangible assets, especially when the precise term is not specified or when broadly discussing the concept of allocating the cost of an asset over its useful life. The other options (cash-basis accounting, accruing, direct write-off) do not describe this process.

The Process of Allocating a Property, Plant, and Equipment Asset's