Depreciation in Accounting Is the Process of Allocating to Expense

question 128

True/False

Depreciation in accounting is the process of allocating to expense the cost of an asset over its service life.

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Definitions:

Periodic Inventory System

An inventory system where inventory levels are updated at specific intervals, typically through physical counts.

Net Method

A technique for accounting where discounts for early payment are assumed to be taken and recorded as such.

Returned Merchandise

Items that have been sold and subsequently returned by the customer to the seller due to defects, dissatisfaction, or other reasons.

Inventory Returns Estimated

An estimate of the value of goods that are anticipated to be returned by customers, used for accounting and inventory management purposes.