The Total Amount of Depreciation Recorded Against an Asset or Group

question 29

Multiple Choice

The total amount of depreciation recorded against an asset or group of assets during the entire time the asset or assets have been used in the day-to-day operations of the business is:

• A)Referred to as depreciation expense.
• B)Referred to as accumulated depreciation.
• C)Shown on the income statement of the final period.
• D)Only recorded when the asset is disposed of.
• E)Referred to as an accrued asset.

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Definitions:

Capital

Represents the financial resources used by a business to fund its operations and growth, often in the form of money, assets, or equity.

Income Summary

An account to which the revenues and expenses are transferred in order to close the books and transfer the net balance to owner’s equity.

Real Account

A permanent account in accounting that tracks the balances of assets, liabilities, and equity, and is not closed at the end of the accounting period.

Cash

Refers to money in the form of coins or banknotes, especially that possessed by a person or business for transactions.