Which of the Following Is Not True Regarding Depreciation

question 68

Multiple Choice

Which of the following is not true regarding depreciation?

• A) Depreciation allocates the cost of a fixed asset over its estimated life.
• B) Depreciation expense reflects the decrease in market value each year.
• C) Depreciation is an allocation not a valuation method.
• D) Depreciation expense does not measure changes in market value.

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Definitions:

Medicare

A federal health insurance program in the United States primarily for people aged 65 and older, but also available to some younger individuals with disabilities.

Medigap

Private insurance that Medicare recipients can purchase to reduce the gap in coverage—the amount they would have to pay from their own pockets after receiving Medicare benefits.

Relative Value

A measure of the worth of something in comparison to the price, quantity, or value of another item or measure.

Prepayment

The act of paying for goods, services, or expenses in advance before receiving or using them.