The accounting term depreciation measures
A)an asset's market value decline.
B)the amount of cash a company sets aside for asset replacement.
C)the amount of asset cost allocated to expense over periods benefited.
D)anticipated losses if sold in the used market.

Question

Quizplus · Accepted Answer

Depreciation is the allocation of an asset's cost over its useful life. It represents the decrease in value of an asset due to wear and tear, obsolescence, or other factors. It is not related to the market value decline of an asset (A), nor to the cash set aside for asset replacement (B). It also does not reflect anticipated losses if sold in the used market (D).

The Accounting Term Depreciation Measures