What Is Depreciation

question 13

Multiple Choice

What is depreciation?

• A) an effort to achieve proper matching of the cost of operating assets with related revenues
• B) an accumulation of funds to replace the related plant asset
• C) the difference between the original cost and the salvage value of an asset
• D) the cash allocated each period to maintain a plant asset

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Definitions:

Acknowledged Sale

A sale in which the parties involved officially recognize the transaction, often through a formal acknowledgment document.

FOB

Free On Board, a term used in shipping to indicate that the seller bears the cost of delivering goods to a specified point and the buyer takes responsibility for damage and loss from that point forward.

Transportation Costs

Expenses associated with the movement of goods or individuals from one location to another.

Selling Price

The amount of money for which a product or service is offered for sale to the public.