The Process of Allocating the Cost of Plant and Equipment

question 104

Multiple Choice

The process of allocating the cost of plant and equipment over the time period in which they are used is referred to as:

• A)depreciation.
• B)depletion.
• C)amortization.
• D)deferred costs.

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Definitions:

Units-Of-Production Method

An accounting method of depreciation where an asset's cost is allocated based on the number of units it manufactures or produces.