Which of the Following Is Not True Regarding Depreciation

question 30

Multiple Choice

Which of the following is not true regarding depreciation?

• A) depreciation allocates the cost of a fixed asset over its estimated life.
• B) depreciation expense reflects the decrease in market value each year.
• C) depreciation is an allocation not a valuation method.
• D) depreciation expense does not measure changes in market value.

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Definitions:

Support Department Costs

Indirect costs incurred by units or departments that do not directly produce goods or services but support those who do, such as human resources or IT departments.

Product Costs

Costs that are directly associated with the production of goods, including materials, labor, and overhead.

Support Department Costs

Overhead costs associated with functions that do not directly contribute to the production of goods or services but are necessary for operational efficiency.

Production Departments

Specific areas or units within a manufacturing facility where distinct phases of the production process are carried out.