What is the main purpose of recording depreciation?
A)To allocate the cost of a tangible asset to the periods in which its use contributes to earning revenue.
B)To estimate the remaining useful life of the asset.
C)To report the asset on the statement of financial position at the estimated amount for which the asset could be sold on the statement of financial position date.
D)To estimate the current replacement cost of the asset.

Question

Quizplus · Accepted Answer

The main purpose of recording depreciation is to allocate the cost of a tangible asset to the periods in which its use contributes to earning revenue. It is a systematic allocation of the cost of an asset over its useful life in a rational and systematic manner that best reflects the consumption of the asset's benefits over time.

What Is the Main Purpose of Recording Depreciation