Which of the Following Is Not True Regarding Depreciation

question 68

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:

RMBCA

The Revised Model Business Corporation Act, a set of model laws prepared by the American Bar Association to provide a standard for the governance of business corporations in the United States.

Fundamental Changes

Significant alterations in the operations, structure, or activities of an organization or system that have a profound effect on its function.

Charter Amendments

Changes or modifications made to a corporation’s charter or articles of incorporation, typically requiring approval from shareholders and/or regulatory authorities.

Strict Liability

A legal principle that holds a party responsible for damages or harm caused by their actions or products, without the need to prove negligence or fault.