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Statement 1: The cost of an asset, or other amount substituted for cost, less its residual value is called “depreciation”. Statement 2: And, “depreciation” on the other hand, is the systematic allocation of theamount of depreciation of an asset over its useful life.   a. Statement 1 is correct b. Statement 2 is correct c. Both statements are correct d. Both statements are wrong

Statement 1: The cost of an asset, or other amount substituted for cost, less its residual value is called “depreciation”. Statement 2: And, “depreciation” on the other hand, is the systematic allocation of theamount of depreciation of an asset over its useful life.   a. Statement 1 is correct b. Statement 2 is correct c. Both statements are correct d. Both statements are wrong

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 4MC: Which of the following statements about capitalizing costs is correct? A. Capitalizing costs refers...
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Statement 1: The cost of an asset, or other amount substituted for cost, less its residual value is called “depreciation”.

Statement 2: And, “depreciation” on the other hand, is the systematic allocation of theamount of depreciation of an asset over its useful life.

 

a. Statement 1 is correct

b. Statement 2 is correct

c. Both statements are correct

d. Both statements are wrong

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