The method used to save money that will be needed to replace expensive pieces of equipment is called ________.
A) Inventory
B) Deductible
C) Depreciation
D) Amortization

Question

Quizplus · Accepted Answer

Depreciation is the process of allocating the cost of an asset over its useful life. This method allows a company to save money over time to replace expensive pieces of equipment by accounting for the decrease in the value of the asset through wear and tear, obsolescence, or market conditions. Inventory is a record of goods and materials held available in stock. Deductible refers to the amount of money that must be paid by an insured person before an insurance company will pay for the rest of the claim. Amortization refers to the process of spreading out the cost of an intangible asset (such as a patent or trademark) over its useful life.

The Method Used to Save Money That Will Be Needed