This accounting concept measures the wearing away of physical assets due to use and time.

This accounting concept measures the wearing away of physical assets due to use and time.

• A. Balance Sheet
• B. Amortization
• C. Depreciation
• D. Non-operating Income

Answer: (C)

Depreciation is the accounting method used to allocate the cost of tangible fixed assets over their useful life, reflecting wear and tear from use and the passage of time. It is a non-cash expense recorded on the income statement and reduces the asset’s carrying amount on the balance sheet as the asset ages. This helps match the asset’s cost with the revenue it helps generate. Amortization covers intangible assets, not physical ones, and non-operating income relates to items outside normal operations.

Depreciation is the accounting method used to allocate the cost of tangible fixed assets over their useful life, reflecting wear and tear from use and the passage of time. It is a non-cash expense recorded on the income statement and reduces the asset’s carrying amount on the balance sheet as the asset ages. This helps match the asset’s cost with the revenue it helps generate. Amortization covers intangible assets, not physical ones, and non-operating income relates to items outside normal operations.