Devaluing a physical asset over the period of its expected life.
A) Operations
B) Working capital
C) Goodwill
D) Depreciation

Question

Quizplus · Accepted Answer

Depreciation is the process of allocating the cost of a physical asset over its expected life. This is done to reflect the gradual decrease in the asset's value and usefulness over time due to wear and tear, obsolescence or other factors. By depreciating an asset, a business can spread out its initial cost over its useful life, which in turn reduces its taxable income and increases the accuracy of its financial statements.

Devaluing a Physical Asset Over the Period of Its Expected