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:

Divisional Structure

An organizational layout where operations are divided into separate divisions based on product, service, market, or geographic region, each with its own set of functions.

Same Product

Identical items or services offered under different names or by different companies, often with no significant difference in function or quality.

Same Area

Referring to either a physical space where activities or operations are conducted by a group or to a field of expertise or interest that individuals share.

Price Floor

A government- or authority-imposed minimum price set above the equilibrium price, preventing the price of a good or service from falling lower.