The correct answer is: C. Both of allocation and valuation
Depreciation is the process of allocating the cost of an asset over its useful life. This is done by assigning a portion of the asset’s cost to each accounting period in which the asset is used. The amount of depreciation expense recognized in each period is based on the asset’s remaining useful life and its salvage value.
Depreciation is a process of valuation because it assigns a value to an asset over time. This value is used to determine the amount of depreciation expense that should be recognized in each period. The value of an asset decreases over time due to wear and tear, obsolescence, and other factors.
Depreciation is also a process of allocation because it assigns the cost of an asset to the periods in which it is used. This is done by dividing the asset’s cost by its useful life. The amount of depreciation expense recognized in each period is based on the asset’s remaining useful life and its salvage value.
The other options are incorrect because they do not fully describe the process of depreciation. Option A, allocation, is only one part of the process of depreciation. Option B, valuation, is also only one part of the process of depreciation. Option D, none of these, is incorrect because it does not describe the process of depreciation at all.