Depreciation is based on which of the following assumptions?
A) The period of utility of an asset is not fixed or determinable.
B) The value of an asset declines in a predictable manner over the period of utility.
C) The salvage value of an asset will not exist when the depreciation process is complete.
D) The value of an asset is not fixed or determinable.

Question

Quizplus · Accepted Answer

Depreciation assumes that the value of an asset declines in a predictable manner over the period of utility. A is incorrect as the period of utility of an asset is fixed or determinable. C is incorrect as depreciation considers the salvage value of an asset at the end of its useful life. D is incorrect as the value of an asset is generally fixed or determinable, but it may decline over time due to factors like wear and tear, obsolescence, or market conditions.

Depreciation Is Based on Which of the Following Assumptions