Depreciation is
A)an effort to achieve proper matching of the cost of operating assets with related revenues.
B)an accumulation of funds to replace the related plant asset.
C)the difference between the original cost and salvage value of an asset.
D)the cash allocated each period to maintain a plant asset.

Question

Quizplus · Accepted Answer

Depreciation is a method of allocating the cost of the asset over its useful life in a systematic and rational manner to achieve proper matching of the cost of operating assets with related revenues. Depreciation is not an accumulation of funds to replace the related plant asset, the difference between the original cost and salvage value of an asset, or the cash allocated each period to maintain a plant asset.

Depreciation Is