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Question
____________ does not suffer depreciation.
____________ does not suffer depreciation.
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Solution
The correct option is D Land
Land is not depreciated because land is assumed to have an unlimited useful life. Other long-lived assets such as land improvements, building, furnishing, equipment, etc. have limited useful lives. Therefore, the costs of those assets must be allocated to those limited accounting periods.
Land is not depreciated because land is assumed to have an unlimited useful life. Other long-lived assets such as land improvements, building, furnishing, equipment, etc. have limited useful lives. Therefore, the costs of those assets must be allocated to those limited accounting periods.
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