Why depreciation must be recorded on the company

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The Adjusting Process

Assume that you are the accountant for Computer Consultants. Prior to this year, Computer Consultants operated out of a leased office. However, the company purchased its own office building this year. The building is in an area where real estate values have been increasing an average of 6 percent per year.

Question 1: The owner of Computer Consultants has asked why you recorded depreciation on the building if real estate values are appreciating. Provide an explanation as to why depreciation must be recorded on the company's accounting records.

Reference no: EM132647207

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