Asked by Allysa Restaino on Jun 17, 2024
Verified
The total amount of depreciation recorded against an asset over the entire time the asset has been owned:
A) Is referred to as depreciation expense.
B) Is referred to as accumulated depreciation.
C) Is shown on the income statement of the final period.
D) Is only recorded when the asset is disposed of.
E) Is referred to as an accrued asset.
Accumulated Depreciation
The total amount of depreciation expense that has been recorded for an asset since it was acquired, reflecting its loss of value over time.
Depreciation Expense
The orderly division of a tangible asset's expense over its operational life.
Asset Ownership
The legal rights and interests a person or entity has in tangible and intangible items of value.
- Gain an understanding of the depreciation concept and its implications for financial statements.
Verified Answer
NA
Nnandii AlexanderJun 22, 2024
Final Answer :
B
Explanation :
The total amount of depreciation recorded against an asset over the entire time the asset has been owned is referred to as accumulated depreciation. This is a contra-asset account that offsets the original cost of the asset on the balance sheet. It is not shown on the income statement and is recorded throughout the life of the asset, not just when it is disposed of. Accrued assets are assets that have been earned but not yet received.
Learning Objectives
- Gain an understanding of the depreciation concept and its implications for financial statements.