alleryDepreciation is best described as:
ASystematic allocation of cost
BA cash payment to vendors
CAn increase in asset value
DA tax credit available item
Answer & Solution
Correct answer: A. Systematic allocation of cost
1. Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life.
2. Depreciable amount = cost (or revalued amount) − residual value.
3. It is a non-cash, accounting allocation, not a payment or appreciation.
_Source: ICAI BoS Foundation Paper 1, Ch 5 "Depreciation & Amortisation", §1.1 ¶3_
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