Accounting for IGCSE & O level - Final Statements (Section 9 - No. 32)
What is the purpose of depreciation?
To record the increase in value of an asset.
To allocate the cost of a long-term asset over its useful life.
To calculate the market value of an asset.
To reduce a company's tax liability.
Selitys
Depreciation systematically allocates the cost of a long-term asset (like equipment) over its useful life.