Which one of the following statements is not true regarding depreciation?
A)It is a systematic, rational method of allocating the cost of an asset over its useful life.
B)It attempts to match the costs of acquiring an asset to the benefits to be derived from the asset.
C)It does not attempt to measure the value of the asset.
D)It provides funds for the replacement of the asset through tax savings over the asset's life.

Question

Quizplus · Accepted Answer

Depreciation provides tax savings over the asset's life, but it does not provide actual funds for the replacement of the asset. The company must still use other sources of financing to purchase a new asset when the current one is fully depreciated.

Which One of the Following Statements Is Not True Regarding