Which Statement About Depreciation Is TRUE

question 215

Multiple Choice

Which statement about depreciation is TRUE?

• A)Depreciation means loss in economic value.
• B)Depreciation means to capitalize a cost over several accounting periods.
• C)Depreciation refers to an allocation of an asset's cost to an expense account.
• D)Depreciation means to increase net income by transferring balances from shareholders' equity.

Learn how to calculate the net present value (NPV) of an investment and understand its importance in investment decision making.

Comprehend the impact of discount rates on the present value of future cash flows.

Understand the significance of additional working capital and its effect on investment projects.

Grasp the concept of salvage value and its role in capital budgeting analysis.

---

Definitions:

Aggregate Demand

Aggregate demand is the total demand for all goods and services in an economy at a given overall price level and in a given time period.

Active Stabilization Policy

Government policies aimed at reducing economic fluctuations through fiscal and monetary actions.

Fiscal Policy

Government policies related to taxation and spending that aim to influence economic conditions.

Monetary Policy

The set of actions by a central bank or monetary authority to control the supply of money and interest rates in its economy.