Question

The statement that best describes the nature of accounting depreciation is________ (select one)

a. A charge representing a change in the assets market value

b. A charge representing the decline in the physical efficiency of the asset

c. The amount that can be claimed as a tax reduction.

Answer 1

✓Depreciation is defined as reduction in the value of asset due to usage or wear and tear over the useful life of asset.

✓ Depreciation expense can be calculated by using straight line method , Written down value method and Units of production method etc.

✓ Depreciation can be provided due to one the reason i.e Reduce the phisical efficiency of asset over the useful life of asset.

Therefore,

The statement that best describes the nature of accounting depreciation is " A charge representing the decline in the phisical efficiency of the asset."

Option " b" is correct answer.

For any clarifications, please comment, thank you.