The cost of an asset that has been depreciated for a single period. It shows how much of the asset's value has been used up in that year.

The cost of an asset that has been depreciated for a single period. It shows how much of the asset's value has been used up in that year.

• A. Depreciation
• B. Accumulated depreciation
• C. Depreciation expense
• D. Service life

Answer: (C)

This question tests understanding of depreciation expense—the amount of an asset’s cost allocated to a single period, showing how much of the asset’s value is used in that year. Depreciation expense is the annual charge recorded on the income statement and reflects the cost of using the asset during that year. It is calculated by applying the chosen depreciation method to allocate the asset’s cost (minus any residual value) over its useful life, with straight-line being the simplest example: (cost − residual value) ÷ useful life. Accumulated depreciation is the running total of depreciation recognized since the asset was acquired, shown as a contra-asset on the balance sheet, not the amount for just one year. Depreciation, in general, refers to the broader process of allocating cost over time, not the specific annual amount. Service life is the estimated period the asset is expected to be useful, not the amount charged in a single year.

This question tests understanding of depreciation expense—the amount of an asset’s cost allocated to a single period, showing how much of the asset’s value is used in that year. Depreciation expense is the annual charge recorded on the income statement and reflects the cost of using the asset during that year. It is calculated by applying the chosen depreciation method to allocate the asset’s cost (minus any residual value) over its useful life, with straight-line being the simplest example: (cost − residual value) ÷ useful life.

Accumulated depreciation is the running total of depreciation recognized since the asset was acquired, shown as a contra-asset on the balance sheet, not the amount for just one year. Depreciation, in general, refers to the broader process of allocating cost over time, not the specific annual amount. Service life is the estimated period the asset is expected to be useful, not the amount charged in a single year.