Question

Which statement about depreciation is​ false? A. Depreciation is a process of allocating the cost of an asset to expense over its useful life. B. Obsolescence as well as physical wear and tear should be considered when determining the period over which an asset should be depreciated. C. A major objective of depreciation accounting is to allocate the cost of using an asset against the revenues it helps to generate. D. Depreciation should not be recorded in years in which the market value of the asset has increased.

Answer 1

Answer:

The correct answer is letter "D": Depreciation should not be recorded in years in which the market value of the asset has increased.

Explanation:

Depreciation indicates how much the value of the asset has been used. It also aims to match the cost of the asset to the income that the asset helps the company to earn. Used as an income tax deduction, the depreciation calculation provides businesses with an annual allowance for the use and deterioration of tangible assets such as machinery, equipment, and buildings.

Depreciation is recorded throughout all the useful life of an asset until its disposal.