Which of the following statements is true regarding depreciation?
A) Depreciation is a valuation concept; that is, we allocate costs to reflect the actual change in the value of the asset.
B) Depreciation allocates the cost of a long-lived asset to the accounting periods over which it is used.
C) Depreciation expense will typically will be shown on the statement of financial position.
D) Accumulated depreciation has a normal debit balance.

Question

Quizplus · Accepted Answer

Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life. It is not a valuation concept, and accumulated depreciation typically has a credit balance. Depreciation expense is shown on the income statement, not the statement of financial position.

Which of the Following Statements Is True Regarding Depreciation