The purpose of depreciation is to
A) Measure the change in an asset's value
B) Adjust the carrying value of an asset to market value
C) Allocate the asset's cost to the periods benefiting from its use
D) Recognize the reduced usefulness of an asset
E) Adjust the ledger account balances for assets to equate to their current market value

Question

Quizplus · Accepted Answer

The purpose of depreciation is to allocate the cost of an asset over its useful life to the periods in which it provides benefit. This is done by recognizing the reduction in usefulness of the asset over time. Options A, B, D, and E are not the primary purpose of depreciation.

The Purpose of Depreciation Is to