Which of the Following Statements Most Appropriately Describes the Purpose

question 4

Multiple Choice

Which of the following statements most appropriately describes the purpose of depreciation of 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.

---

Definitions:

End-Of-Period Spreadsheet

A financial report used to compile and summarize the accounting information at the end of an accounting period, including balances for assets, liabilities, and equity.

Income Statement Columns

Divisions in the income statement document that categorize and display revenues, expenses, and profit or loss data.

Net Income

A company's profit margin post the deduction of all expenses and taxation from the total revenue.

Net Loss

The result when a company's expenses exceed its revenues during a specific period, indicating a negative income.