The factors used to compute depreciation expense are an asset's:
A)Cost,residual value,and physical life.
B)Cost,residual value,and service life.
C)Fair market value,residual value,and economic life.

Question

Quizplus · Accepted Answer

Depreciation expense is based on an asset's cost, residual value, and service life. Cost refers to the price paid to acquire the asset, residual value is the estimated value at the end of the asset's useful life, and service life is the estimated period of time during which the asset will be used to generate revenue for the company. Fair market value and economic life are not typically used factors in calculating depreciation expense.

The Factors Used to Compute Depreciation Expense Are an Asset's