Which of the following is the main reason for depreciating non-current assets?
A) To show consumption of economic benefits
B) To enable a business to continue production
C) To lessen the losses suffered by businesses
D) To set aside funds for the replacement of assets

Question

Quizplus · Accepted Answer

Depreciation is a method used to allocate the cost of non-current assets over their useful lives. The main reason for depreciating non-current assets is to show the consumption of economic benefits associated with the use of these assets. This helps in providing a more accurate picture of the company's profitability by matching the expenses associated with the asset against the revenue generated from it.

Which of the Following Is the Main Reason for Depreciating