Accounting · Depreciation
Which one of the following statements regarding depreciation is not correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Depreciation must be charged to accurately ascertain the true net profit or loss of a business.
- 2The main cause of depreciation is the wear and tear caused by the continuous usage of assets.
- 3Depreciation is primarily a process of market valuation of assets rather than cost allocation.✓
- 4Depreciation is a non-cash operating expense.
Correct answer
Depreciation is primarily a process of market valuation of assets rather than cost allocation.
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