Question

The purpose of depreciation is to A) Measure the change in an asset's value B) Adjust the carrying value of an asset to market value C) Adjust the ledger account balances for assets to equate to their current market value D) Allocate the asset's cost to the periods benefiting from its use E) Recognize the reduced usefulness of an asset

Answer 1

Answer:

The correct answer is letter "C": Allocate the asset's cost to the periods benefiting from its use.

Explanation:

Depreciation indicates how much the worth of the asset has been used up. It also tries to balance the expense of the asset to the revenue that the asset allows the company to gain meaning it helps to assign the cost of the asset compared to the profit it contributed to creating. Used as a deduction of income tax, the depreciation measure gives companies an annual allowance for the use and deterioration of a capital asset.