Which of the following statements is true?
A) Depreciation allocates the cost of tangible assets over their useful lives.
B) Depreciation allocates the cost of intangible assets over their useful lives.
C) Amortization allocates the cost of tangible assets over their useful lives.
D) The term "depreciation" relates to all long-lived assets whereas "amortization" relates only to intangible

Question

Quizplus · Accepted Answer

Depreciation is the process of allocating the cost of tangible assets such as buildings, machinery, and equipment over their useful lives. Amortization, on the other hand, is the process of allocating the cost of intangible assets such as patents, trademarks, and copyrights over their useful lives. Choice B and C are therefore incorrect. Choice D is also incorrect as depreciation only relates to tangible assets, not all long-lived assets.

Which of the Following Statements Is True