Which of the Following Statements About Depreciation Is True

Multiple Choice

Which of the following statements about depreciation is true?

A) Depreciation is the allocation of the cost of equipment to expense.
B) Depreciation represents the reduction in the market value of the asset.
C) Depreciation is the cash paid each month to use a piece of equipment.
D) Depreciation is the same under both cash-based and accrual-based accounting.