Depreciation is:
A) An exact calculation of the decline in value of an asset.
B) Only an estimate of the decline in value of an asset.
C) Only recorded at the end of a year and never over a shorter time period.
D) Management must know the exact life of an asset in order to calculate an acceptable depreciation expense.

Question

Quizplus · Accepted Answer

Depreciation is an estimate of the decline in value of an asset over time. While management may have an expected life for an asset, actual usage and market conditions can vary. Depreciation is recorded over the useful life of an asset, and can be calculated annually, quarterly, or even monthly depending on accounting policies.

Depreciation Is