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

question 131

True/False

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

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time.

Paid-in Capital

Funds raised by a company through the sale of its own shares, representing the equity capital provided by investors to the business.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, represented by the owners' claims against the company's assets.

Stock Dividend

Shareholders receive additional shares as a payment from a corporation, rather than receiving cash.