Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 4 - No. 3)
What is a primary purpose of recording depreciation?
To determine the asset's market value.
To allocate the cost of an asset over its useful life.
To show the amount of cash spent on the asset.
To calculate the asset's replacement cost.
Explanation
Depreciation spreads the cost across the asset's lifespan.
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