Which of the following is not true regarding depreciation?
A) depreciation allocates the cost of a fixed asset over its estimated life.
B) depreciation expense reflects the decrease in market value each year.
C) depreciation is an allocation not a valuation method.
D) depreciation expense does not measure changes in market value.

Question

Quizplus · Accepted Answer

Depreciation is the allocation of the cost of a fixed asset over its useful life, not a reflection of the decrease in market value. Therefore, option B is not true.

Which of the Following Is Not True Regarding Depreciation