Joe Yusakae just slept through the class in which Professor Ogilvie explained the concept of depreciation. Because the next test is scheduled for Friday, Yusakae telephones Dan Danielson to get his notes from the lecture. Danielson’s notes are concise: “Depreciation—Sounds like Greek to me.” Yusakae next tries Sara Visaj, who says she thinks depreciation is what happens when an asset wears out. Andrew Greyson is confident that depreciation is the process of creating a cash fund to replace an asset at the end of its useful life.
Requirement
1. Explain the concept of depreciation for Yusakae. Evaluate the explanations of Visaj and Greyson. Be specific.