Depreciation is a means of cost allocation, not a matter of valuation.

Name: Depreciation is a means of cost allocation, not a matter of valuation.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Depreciation spreads the cost of an asset over its useful life, but does not affect the asset's valuation. The asset's value decreases over time due to wear and tear or obsolescence, but this is not related to the depreciation expense recorded on the company's financial statements.

Depreciation Is a Means of Cost Allocation, Not a Matter