Question

The depreciation expense of an asset can change for all of the following reasons EXCEPT

a. change in the asset's expected residual value.
b. change in the asset's expected useful life.
c. increase in the asset due to major repairs.
d. increase in the asset due to regular repairs and maintenance.

Answer 1

The depreciation expense of an asset can change due to alterations in an asset's expected residual value, useful life, or major repairs that increase the asset’s value. However, regular repairs and maintenance are operating expenses and do not affect depreciation expense.

Step-by-step explanation:

The depreciation expense of an asset can change, but an increase in the asset due to regular repairs and maintenance does not typically change the depreciation expense. Rather, the depreciation expense may change due to a change in the asset's expected residual value or its expected useful life. Major repairs that increase the asset's value or extend its useful life may also be capitalized and result in a change to depreciation expense. Regular repairs and maintenance are considered operating expenses and do not affect the depreciation calculation.