During a study session, one of your classmates states the following: Companies depreciate their capital assets over
Question:
During a study session, one of your classmates states the following:
“Companies depreciate their capital assets over time because they understand that capital assets immediately begin to lose value from the date of purchase. Depreciation accounts for this loss. The straight-line method is a method of evaluating depreciation, which assumes that a capital asset loses its value at the same rate over a given period of time. In other words, depreciation expense should be the same every period as long as the capital asset is being accounted for.”
Required
Evaluate your classmate’s response. Identify the elements that are correct and incorrect.
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Related Book For
Understanding Financial Accounting
ISBN: 9781119406921
2nd Canadian Edition
Authors: Christopher D. Burnley
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