What is the primary purpose of depreciation? a) To track market value b) To allocate the cost of a long-term asset over its useful life c) To recognize an immediate expense d) To increase revenue

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter17: Activity Resource Usage Model And Tactical Decision Making
Section: Chapter Questions
Problem 5DQ: What is a relevant cost? Explain why depreciation on an existing asset is always irrelevant.
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What is the primary purpose of depreciation?

What is the primary purpose of depreciation?
a) To track market value
b) To allocate the cost of a long-term asset over
its useful life
c) To recognize an immediate expense
d) To increase revenue
Transcribed Image Text:What is the primary purpose of depreciation? a) To track market value b) To allocate the cost of a long-term asset over its useful life c) To recognize an immediate expense d) To increase revenue
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