Depreciation Is the Allocation of a Plant Asset's Cost to Expense

question 166

True/False

Depreciation is the allocation of a plant asset's cost to expense over its useful life.

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Definitions:

Revenue Account

An account in the general ledger that records the income earned by a company, from sales or services, before any deductions.

Net Loss

Occurs when a company's total expenses exceed its total revenues during a specific period, indicating negative profitability.

Revenue Accounts

Accounts that track the income earned from the sale of products or services.

Capital

Capital refers to the financial resources that businesses use to fund their operations and grow, including equity, debt, and retained earnings.