Asked by Alyssa Palmer on Jul 03, 2024
Verified
Which of the following events is most appropriately recorded as a reduction to accumulated depreciation?
A) an addition that increases the anticipated benefits of the old asset
B) an improvement that extends an asset's useful life
C) an improvement that increases the asset's expected benefits beyond that originally expected
D) a replacement of a better asset for the one currently used
Accumulated Depreciation
The total amount of depreciation expense that has been recorded against a fixed asset since it was put into use.
Anticipated Benefits
Anticipated benefits are the expected positive outcomes or gains that result from particular actions or investments.
Useful Life
The expected period over which an asset is anticipated to be used by an organization, or the number of production or similar units expected to be obtained from the asset.
- Comprehend the effect of asset improvements on depreciation and asset valuation.
Verified Answer
ZK
Zybrea KnightJul 07, 2024
Final Answer :
B
Explanation :
A reduction to accumulated depreciation is appropriate when an improvement is made to an asset that extends its useful life. This is because the amount of depreciation recorded for an asset is based on its useful life. By extending its useful life, the amount of depreciation recognized over time will be reduced. The other options listed may result in an adjustment to the asset's carrying value, but not a reduction to accumulated depreciation.
Learning Objectives
- Comprehend the effect of asset improvements on depreciation and asset valuation.