Question

The loss in the value of an automobile that occurs over its period of ownership is called: Group of answer choices reinsurance. the acquisition payment. the market price. the repurchase commission. depreciation.

Answer 1

depreciation.

Step-by-step explanation:

Depreciation is the reduction in value of a long term asset as it is used over the years

for example, as one uses a vehicle, its value reduces due to wear and tear

depreciation is a way of expensing the cost of purchasing an asset

types of depreciation

Straight line depreciation expense = (Cost of asset - Salvage value) / useful life

Activity method based on output = (output produced that year / total output of the machine) x (Cost of asset - Salvage value)

Activity method based on hours worked = (hours worked that year / total hours of the machine) x (Cost of asset - Salvage value)

Sum-of-the-year digits = (remaining useful life / sum of the years ) x (Cost of asset - Salvage value)