Depreciation of noncurrent operating assets is an accounting process for the purpose of
A) reporting declining asset values on the balance sheet.
B) allocating asset costs over the periods benefited by use of the assets.
C) accounting for costs to reflect the change in general price levels.
D) setting aside funds to replace assets when their economic usefulness expires.

Question

Quizplus · Accepted Answer

Depreciation of noncurrent operating assets involves allocating the cost of the asset over the periods benefited from the use of the asset. This is done to match the cost of the asset with the revenue generated from using the asset. Depreciation is not done to report declining asset values on the balance sheet, account for costs to reflect the change in general price levels, or set aside funds to replace assets when their economic usefulness expires.

Depreciation of Noncurrent Operating Assets Is an Accounting Process for the Purpose