Which Statement Best Describes the Nature of Depreciation

question 21

Multiple Choice

Which statement best describes the nature of depreciation?

• A) Writing down the value of an asset according to the change in its market value.
• B) Writing down the value of an asset according to the decline in its physical efficiency.
• C) Allocating the cost of an asset over its useful life.
• D) A charge against profits to provide funds for asset replacement.

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Definitions:

Biological Molecule

Compounds that are vital for the existence and function of living organisms, including proteins, carbohydrates, lipids, and nucleic acids.

Condensation

Chemical reaction in which a large molecule is assembled from smaller sub-units; water also forms.

Polymers

Large molecules composed of many repeated subunits, which can be found in various natural and synthetic materials like plastics, proteins, and DNA.

Monomers

Simple molecules that can join together to form polymers, which are large, complex structures.