Alysha monet has prepared the following list of statements about depreciation. identify each statement as true or false. 1. depreciation is a process of asset valuation, not cost allocation. select an option 2. depreciation provides for the proper recording of expenses (efforts) with revenues (results). select an option 3. the book value of a plant asset should approximate its fair value. select an option 4. depreciation applies to three classes of plant assets: land, buildings, and equipment. select an option 5. depreciation does not apply to a building because its usefulness and revenue-producing ability generally remain intact over time. select an option 6. the revenue-producing ability of a depreciable asset will decline due to wear and tear and to obsolescence. select an option 7. recognizing depreciation on an asset results in an accumulation of cash for replacement of the asset. select an option 8. the balance in accumulated depreciation represents the total cost that has been charged to expense since placing the asset in service. select an option 9. depreciation expense and accumulated depreciation are reported on the income statement. select an option 10. three factors affect the computation of depreciation: cost, useful life, and salvage value.

1. False; 2. True; 3. False; 4. False; 5. False; 6. False; 7. False; 8. True; 9. False; 10. False.

Explanation:

1. Depreciation is a cost allocation of assets through out its useful life and may not necessarily reflect the true value of the asset are the point of recording.

2. Through accounting for depreciation, asset costs are recorded through out their useful life instead of at the point of purchasing. It is a appropriate methodology because asset will be consumed and will bring economic values during its useful life instead of at the point of acquiring.

3. Book value of plant asset should not always around its fair value. As the book value may deprive from depreciation accounting for that certain asset instead of the current fair value of that asset.

4. It may apply to other types of assets like vehicles, machinery...

5. Building may get obsolete, damaged during time and thus its ability to create economic benefit can not be intact over time.

6. It may not always be right because the revenue-producing ability of an asset depends on many factors, for example, the demand and supply of the product that asset is used in the product's manufacture process.

7. It results in the increase in expenses recognized in the P&L statement and Accumulated depreciation (contra- asset account) in the Balance sheet statement.

8. The balance records the accumulated depreciation expenses since the asset is purchased.

9. Depreciation expenses is recorded in the P&L statement while the accumulated depreciation is recorded in the balance sheet statement.

10. There is another factor: obsolescence.