The purpose of depreciation accounting is to: Select one: A. Accumulate funds to replace a plant asset at the end of its useful life B. Have a plant asset's book value equal its initial cost by the end of its useful life C. Reflect changes in the current value of a plant asset over its useful life D. Allocate a plant asset's cost, less its salvage value, to expense over the asset's useful life
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The purpose of depreciation accounting is best described by:
D. Allocate a plant asset's cost, less its salvage value, to expense over the asset's useful life.
Depreciation accounting aims to allocate the cost of a tangible asset (like machinery, buildings, equipment) over its useful life. It helps in matching the cost of the asset to the periods in which it generates revenue by gradually expensing the cost rather than expensing it all at once. This process reflects the asset's gradual consumption or wear and tear over time.