Answered: What is the primary purpose of…

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?
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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Which of the following accounts would not be included in the Acquisition and Payment for Long-Lived Assets Cycle? a. Revenue b. Depreciation expense c. Gain on disposal d. Equipment
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Which of the following best describes depreciation? A.ccounts for the market value of a physical asset B.Part of the cost of a physical asset allocated as an expense to each time period in which the asset is used. C.Shows the increase in value of a physical asset over the asset’s useful life D.Shows the drop in value of an asset when the asset is first used by an entity
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Depreciation is a process that involves:a. Increasing the value of assetsb. Distributing the cost of an asset over its useful lifec. Eliminating the need for financial statementsd. Reducing the value of liabilities