Multiple Choice
Which of the following is NOT subject to depreciation?
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8. Long Lived Assets
Depreciation: Summary of Main Methods
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Which of the following is not depreciated because it does not get used up?
A
Equipment
B
Buildings
C
Vehicles
D
Land
Verified step by step guidance1
Understand the concept of depreciation: Depreciation is the allocation of the cost of a tangible asset over its useful life. It applies to assets that are used up or wear out over time due to usage or obsolescence.
Identify the types of assets that are depreciated: Assets such as equipment, buildings, and vehicles are depreciated because they have a finite useful life and their value diminishes as they are used or age.
Recognize the unique nature of land: Land is not depreciated because it does not get used up or wear out over time. Unlike other tangible assets, land typically retains its value or may even appreciate over time.
Compare the options provided: Equipment, buildings, and vehicles are all depreciated because they are subject to wear and tear or obsolescence. Land, however, is not depreciated for the reasons mentioned above.
Conclude that the correct answer is land, as it does not get used up and is therefore not subject to depreciation.
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