Which of the following assets will likely experience the most depreciation over a 10-year period?

• A. Office building
• B. Delivery truck
• C. Office furniture
• D. Land

Answer: (B)

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. Assets that are subject to wear and tear, obsolescence, or physical deterioration typically experience depreciation.
2. Analyze the nature of each asset: Delivery trucks are subject to frequent use, wear and tear, and may become obsolete due to advancements in technology or changes in transportation needs. Office furniture may experience wear but typically has a longer useful life. Office buildings generally depreciate at a slower rate due to their durable nature. Land does not depreciate because it does not wear out or become obsolete.
3. Consider the factors affecting depreciation: Delivery trucks are used extensively in operations, leading to faster physical deterioration and obsolescence. Office furniture and buildings are less prone to rapid depreciation, and land is not depreciated at all under accounting standards.
4. Apply accounting principles: Delivery trucks are classified as equipment and are depreciated using methods such as straight-line or accelerated depreciation, reflecting their shorter useful life compared to other assets listed.
5. Conclude based on the analysis: Delivery trucks are likely to experience the most depreciation over a 10-year period due to their high usage, wear and tear, and potential obsolescence.