For which of the following assets would a wholesale company use depreciation?
A) its patented computer tracking equipment
B) inventory of unsold merchandise
C) gasoline used to power its delivery trucks
D) its warehouses

Question

Quizplus · Accepted Answer

A wholesale company would use depreciation for long-term assets such as buildings, warehouses, and equipment, which have a useful life of more than one year. Depreciation is the process of allocating the cost of these assets over their useful lives, in order to match the expense with the revenue they generate. Patented computer tracking equipment would also be subject to depreciation, as it is a long-term asset. Inventory and gasoline are not long-term assets and therefore not subject to depreciation.

For Which of the Following Assets Would a Wholesale Company