Depreciation Concepts (12 marks)

In general terms, explain the reason/purpose for depreciation as an accounting activity. What does depreciation accomplish/avoid? (3 marks)

Again, in general terms, name and briefly describe the three types of depreciation covered in the course. How does a business decide (what criteria) which method of depreciation to use for a given asset? (5 marks)

Given that the sale of an asset can result in a "Gain or Loss on Disposal", do these Gains/Losses represent something that investors/shareholders should be concerned about with regards to evaluating good or bad managment performance? Why or why not? (4 marks)