During a study session, one of your classmates states the following: Companies depreciate their capital assets over

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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.”


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Evaluate your classmate’s response. Identify the elements that are correct and incorrect.

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Related Book For  book-img-for-question

Understanding Financial Accounting

ISBN: 9781119406921

2nd Canadian Edition

Authors: Christopher D. Burnley

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