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Spreading the cost of equipment systematically across the periods it serves is called:
ADemonstration
BDepreciation
CDenomination
DDetermination
Answer & Solution
Correct answer: B. Depreciation
1. The asset gives service over several years.
2. Its cost is allocated across those years.
3. That allocation is depreciation.
_Source: OpenStax Principles of Financial Accounting, Chapter 4, The Adjustment Process._
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