What does entering a cost limit or residual value affect when depreciating an asset?

Entering a cost limit or residual value significantly impacts the value of the asset to be depreciated. When you set a residual value, you're determining the estimated amount that the asset will be worth at the end of its useful life, which directly influences the calculation of depreciation.

In the context of depreciation, the cost limit or residual value sets a boundary on how much of the asset's total cost can be written off during its useful life. This value is subtracted from the asset's purchase price to find the depreciable amount. So, if you have an asset with a purchase price of $10,000 and a residual value of $2,000, the total amount eligible for depreciation would be $8,000. Consequently, adjusting the residual value alters the total declining balance that will be allocated to depreciation expense across the asset's lifespan, making this choice the correct answer.

The other options relate to aspects of asset management but do not directly correspond to the concept of how the cost limit or residual value influences depreciation calculations.