California Real Estate Exam

Category - Real Estate

Which of the following is not true of the term “depreciation”?
  1. It is a decline in the value of property
  2. It is an accounting term showing the declining monetary value of an asset
  3. It is a true expense where money is actually paid
  4. Lenders add back depreciation expense for self-employed borrowers and count it as
Explanation
Answer: C. Depreciation is not a true expense where money is actually paid. It is a decline in the value of property and an accounting term showing the declining monetary value of an asset. Lenders add back depreciation expense for self-employed borrowers and count it as income.
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