A method of allocating the cost of a major asset, such as a piece of capital equipment, over its useful life for tax and accounting purposes is best called:
A) Capital allocation.
B) Expense accounting.
C) Depreciation.
D) Overhead.

Question

Quizplus · Accepted Answer

Depreciation is the accounting method of allocating the cost of a tangible or physical asset over its useful life. It reflects how the asset's value decreases over time due to use, wear and tear, or obsolescence.

A Method of Allocating the Cost of a Major Asset