Which of the Following Statements Most Appropriately Describes the Purpose

question 74

Multiple Choice

Which of the following statements most appropriately describes the purpose of depreciating a long-lived tangible asset?

• A)To indicate how the asset has physically deteriorated.
• B)To show that the asset will eventually and gradually become obsolete.
• C)To record that the asset's market value declines over time.
• D)To match the cost of the asset to the period in which it generates revenue.

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Definitions:

Net Income

The net income of a company, calculated by deducting all expenditures and taxes from the total revenue.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and net income.

Agreement

A mutual understanding or contract between parties outlining terms and conditions for a specific arrangement or transaction.

Persons

Human beings as individuals or considered collectively, especially in a legal or formal context.