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The term used to recognize expense for property, plant, and equipment is Blank______.Multiple choice question.depletionamortizationdepreciation

Question

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Solution

The term used to recognize the expense for property, plant, and equipment is depreciation.

Explanation:

  1. Definition of Depreciation: Depreciation is an accounting method used to allocate the cost of tangible fixed assets over their useful lives. This concept helps in reflecting an asset's reduction in value as it ages or becomes less efficient, thus it is recognized as an expense on the income statement.

  2. Relevance: Unlike amortization, which typically pertains to intangible assets like patents or copyrights, depreciation applies specifically to physical assets, including property, plant, and equipment (PP&E).

  3. Depletion: This term is often associated with natural resources, like minerals and oil, representing the reduction in quantity of a resource as it's used.

In summary, when dealing with property, plant, and equipment in financial accounting, the appropriate term for recognizing the expense is depreciation.

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