Which of the following must be considered in estimating depreciation on an asset for an accounting period?
A)The original cost of the asset
B)Its useful life
C)The decline of its fair market value
D)Both the original cost of the asset and its useful life.

Question

Quizplus · Accepted Answer

Depreciation is the reduction in the value of an asset over a period of time. In estimating depreciation on an asset for an accounting period, it is necessary to consider both the original cost of the asset and its useful life. The original cost of the asset is important because it is the basis for calculating the depreciation expense, while the useful life is important because it determines the period over which the asset will be depreciated.

Which of the Following Must Be Considered in Estimating Depreciation