Which of the Following Statements Is True

question 83

Multiple Choice

Which of the following statements is true?

• A)The entry to record depreciation expense involves a credit to a liability.
• B)The entry to record depreciation expense involves a credit to depreciation expense.
• C)The entry to record depreciation expense involves a credit to the asset being depreciated.
• D)The entry to record depreciation expense involves a credit to a contra-asset.

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Definitions:

Straight-Line

A method of calculating depreciation or amortization by evenly distributing an asset's cost over its useful life.

Straight-Line Depreciation

A method of calculating the depreciation of an asset, which allocates an equal amount of the asset’s cost to each year of its useful life.

Residual Value

The projected worth of an asset at the conclusion of its service life, considering the deductions for depreciation.

Useful Life

The estimated period a fixed asset is expected to be useful for its intended purpose, affecting depreciation calculations.