The purpose of recording depreciation expense is to:
A)provide cash necessary to replace plant assets when they are used up.
B)record the balance sheet amount of plant assets at replacement value.
C)match expenses with revenues using a reasonable systematic method.
D)gain a better understanding of estimating the extraction of natural resources.

Question

Quizplus · Accepted Answer

Depreciation expense is recorded to match expenses with revenues using a reasonable systematic method. It is an allocation of the cost of a long-term asset over its useful life, rather than an attempt to value the asset at replacement cost or to provide cash for asset replacement. Depreciation is not used to estimate the extraction of natural resources.

The Purpose of Recording Depreciation Expense Is To