The statement that is correct concerning depreciation is:
A)Depreciation means that the market price of the depreciable asset is declining
B)The straight-line method is the preferred method of depreciation
C)Depreciation expense as recorded by accountants is a monetary effect of a physical event
D)Depreciation is mainly caused by physical wear and tear

Question

Quizplus · Accepted Answer

Depreciation is the allocation of the cost of a depreciable asset over its useful life. It is not necessarily reflective of the market price of the asset, nor is it solely caused by physical wear and tear. The straight-line method is one type of depreciation calculation, but it may not always be the preferred method. Since depreciation is a non-cash expense, it represents a monetary effect of the physical event of using the asset over time. Therefore, choice C is the correct statement about depreciation.

The Statement That Is Correct Concerning Depreciation Is