Depreciation is a systematic write-off of the cost of a tangible asset that is listed on the:

• A. Statement of Retained Earnings
• B. Statement of Cash Flows
• C. Income Statement
• D. Balance Sheet

Answer: (D)

Verified step by step guidance

1. Understand the concept of depreciation: Depreciation is the systematic allocation of the cost of a tangible asset over its useful life. It reflects the wear and tear or obsolescence of the asset over time.
2. Identify where depreciation is recorded: Depreciation is not directly listed on the Statement of Retained Earnings, Statement of Cash Flows, or Income Statement. Instead, it is recorded on the Balance Sheet as part of accumulated depreciation, which reduces the value of the asset.
3. Learn the relationship between depreciation and the Balance Sheet: On the Balance Sheet, tangible assets are listed under 'Property, Plant, and Equipment' (PP&E). Accumulated depreciation is subtracted from the original cost of the asset to show its net book value.
4. Understand the impact of depreciation on other financial statements: While depreciation itself is recorded on the Balance Sheet, the depreciation expense is reported on the Income Statement, reducing net income. Additionally, depreciation indirectly affects the Statement of Cash Flows by being added back to net income in the operating activities section.
5. Review the correct answer: Based on the explanation above, depreciation is systematically written off and reflected on the Balance Sheet under accumulated depreciation, which reduces the value of tangible assets.