Amortization attempts to adjust the value of the assets to reflect the market value of those assets on the statement of financial position.

Question

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Amortization is a process of allocating the cost of an asset over its useful life, not adjusting the value of the asset to market value. Depreciation is the term used for adjusting the value of fixed assets to reflect their market value.

Amortization Attempts to Adjust the Value of the Assets to Reflect