What is the purpose of recording depreciation

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Reference no: EM132957263

Problem 1: Which of the following ratios indicates how efficiently a company uses it assets to generate sales?

A) Profit margin

B) Return on assets

C) Asset turnover

D) Sustainability

Problem 2: What is the purpose of recording depreciation?

A) To allocate the cost of the assets to the accounting periods in which the assets are used to produce benefits

B) To avoid overstating the book value of the assets

C) To pay for possible future repairs and eventual replacement of the assets

D) To reduce the value of the assets on the balance sheet to their fair values

 

Reference no: EM132957263

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