Depreciation is a process by which
A)replacement funds are accumulated for plant and equipment.
B)the decline in market value of plant and equipment is determined and recorded.
C)the cost of plant and equipment is allocated to expense over the time periods which benefit from the use of the asset.
D)the difference between current market value and historical cost of plant and equipment is determined.

Question

Quizplus · Accepted Answer

Depreciation is the allocation of the cost of a long-term asset over the time periods during which the asset is expected to provide benefits. It does not involve replacement funds, determining market values or calculating the difference between current market value and historical cost.

Depreciation Is a Process by Which