Question

Depreciation is the term that accounts for the loss of value in an asset over time. Generally, an asset has to have substantial value in order to warrant depreciating it.

True

True

False

Answer 1

Answer : True

Depreciation is the term that accounts for the loss of value in an asset over time. Generally, an asset has to have substantial value in order to warrant depreciating it.

Depreciation is a measure of wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time or obsolescence through technology and marketing changes. It is allocated so as to charge fair proportion of the depreciable amount in each accounting period during the expected useful life of the asset. So generally an asset has to have substantial value in order to warrant depreciation it.