Question

    Which of the following methods is used to allocate the

    cost of tangible assets over their useful lives?
    A Amortization Correct Answer Incorrect Answer
    B Depreciation Correct Answer Incorrect Answer
    C Depletion Correct Answer Incorrect Answer
    D Accrual Correct Answer Incorrect Answer

    Solution

    Depreciation is the method used to allocate the cost of tangible assets over their useful lives. It reflects the gradual reduction in the asset's value due to wear and tear, aging, or obsolescence over time. This helps in properly matching expenses with revenue generated from the asset.

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