Question

What does D. mean in the context of allocating the cost of a tangible asset to each of the periods that benefit from its use?

1) Depreciation
2) Distribution
3) Deduction
4) Determination

Answer 1

The term 'D.' in a financial context typically refers to 'Depreciation,' which is the method of allocating a tangible asset's cost over the periods of its useful life.

Step-by-step explanation:

The term D. in the context of allocating the cost of a tangible asset to each of the periods that benefits from its use refers to Depreciation. Depreciation is an accounting method used to allocate the cost of a tangible asset over its useful life. Businesses often use the concept of present discounted value to compare present costs of making an investment to the present discounted value of future benefits, which is a crucial step in capital budgeting decisions. Environmental policy decisions, such as those involving carbon dioxide emissions reductions, also require a comprehensive analysis contrasting present costs with future benefits to address long-term implications like global warming.