MCQ Practice

Which of the following statements best describes the purpose of depreciation?

Subject: AccountingTopic: Accounting
A

Regular reduction of asset value to correspond to changes in market value as the asset ages

B

A process of correlating the market value of an asset with its gradual decline in physical efficiency

C

Allocation of cost in a manner that will ensure that Plant and Equipment items are not carried on the Balance Sheet in excess of net realizable value

D

Allocation of the cost of an asset to the periods in which services are received from the asset

Correct Answer: D