When the cost of a large capital purchase is spread over a period of years instead of being added to the current year's expenses, what accounting practice is being utilized?
A) accrual basis
B) depreciation
C) amortization
D) cash basis
E) cash balancing
Answer: B
Explanation: Depreciation is an accounting procedure for systematically spreading the cost of a tangible asset over its estimated useful life. The company is using depreciation in this case.
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