Answer:
The answer is: b
Explanation:
Depreciation is a non-cash expense that is recognised in the income statement over the useful life of an asset. An asset is a business resource which can be used to generate economic value for the foreseeable future. The matching principle in accounting dictates that expenses incurred to generate revenue should be recognised in the same period which the revenue is earned. In this case, the equipment is purchased to generate revenue for the business, therefore the depreciation expense is recognised in the period where revenue is generated over its useful life. This recognition occurs over the periods when the equipment is utilised by the business, or is deemed beneficial to the business, that is from the purchase date of the equipment to the disposal date of the equipment.
