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unoer ity.UldeRBoard.com/webapps/assessment/take/launch.jsp?course assessment.id 468677.1&course; id 172068 1&content; i Relseumvelsity.blaCK Depreciation Is an outflow of cash from the use of a plant asset. Is applied only to land transactions. ' Is the process of allocating the cost of a plant asset to expense over time. Measures the decline in market value of an asset Question 2 Allowance method of uncollectible accounts is: A calculation that is used to estimate how much credit is allowed to be obtained by the most risky customers. O An estimate of funds that will not be paid on customers' accounts. OBased in international accounting laws and was adopted by the US in 2001. OMore accurate than the direct write-off method. Question3 A company can typically finance through debt or equity. An example of equity financing would be: To acquire more income producing assets To acquire more long term vs short term loans To sell more shares of stock O To take out a line of credit Question 4 Partners' withdrawals of assets are: Credited to their withdrawals accounts O Debited to their withdrawals accounts o credited to their retained earnings . Debited to their retained earnings Question S When payment for cash dividends is made, the transaction would be a: Credit to Dividend Expense and a credit to Cash Debit to Dividend Expense and a credit to Cash Credit to Dividend Payable and a credit to Cash Debit to Dividend Payable and a credit to CashExplanation / Answer
1.
Depreciation is a method of allocating the cost of a plant asset over its useful life. Through depreciation a certain part of the cost of a plant asset is expensed each year and charged against the revenue of that year to match the expense with the revenue of the same period so that correct amount of profit can be determined.
Therefore,
Depreciation is the process of allocating the cost of plant asset to expense over time.
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