The accounting term depreciation measures:
A) the decline in an asset's market value.
B) the amount of cash a company sets aside for asset replacement.
C) the amount of asset cost allocated to expense over periods benefited.
D) the anticipated loss if asset is sold in the used-asset market.

Question

Quizplus · Accepted Answer

Depreciation is the accounting process of allocating the cost of a tangible asset over its useful life. It does not measure the decline in an asset's market value (option A) or the amount of cash a company sets aside for asset replacement (option B). It also does not measure the anticipated loss if an asset is sold in the used-asset market (option D). Option C is the correct answer as it reflects the true definition of accounting depreciation.

The Accounting Term Depreciation Measures