One of your fellow members on the board of directors of a local organization made the following

Question:

One of your fellow members on the board of directors of a local organization made the following statement at a recent meeting:
“Depreciation is related to the loss of value or the decline in the market value of an asset. The best example is how a new car depreciates or loses value the minute it’s driven off the lot.”


Required
Prepare an explanation for your fellow board member to explain how his understanding of depreciation is incorrect.

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Related Book For  book-img-for-question

Understanding Financial Accounting

ISBN: 9781119715474

3rd Canadian Edition

Authors: Christopher D. Burnley

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