Depreciation Expense for Fixed Assets | CFA® Level 1 Exam Prep

Depreciation Expense for Fixed Assets

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Question

Depreciation expense for fixed assets is recorded:

Answers

A. for each period the asset is in use

B. when the asset is sold

C. as a liability until the asset is sold

D. at the end of each fiscal period during the asset's useful life

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Explanations

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A. B. C. D.

Depreciation is the periodic allocation of the cost of a tangible, long-term asset over its estimated useful life, and therefore a period expense. This expense is recorded at the end of each fiscal period until the asset is fully depreciated or disposed of.

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