Question

if a positive change in gross fixed assets is greater than the change in accumulated depreciation...

if a positive change in gross fixed assets is greater than the change in accumulated depreciation for a particular year, net fixed assets increase and this constitutes a source of funds. TRUE or FALSE

Homework Answers

Answer #1

TRUE

Accumulated deprecitaion is the total amount of deprecitaion an asset up to a specific date. Accumulated depriciation is shown on balance sheet, it reprsent that reduce the gross amount of fixed assets. The positive change in gross fixed assets means increasing the fixed asset also it increase the net fixed assets. Here accumulated deprecitaion is less. Increasing  the fixed asset more benefit to the company and at the time of fixed asset sold it is source of fund, so that fixed asset is constitutes of source of funds.In simply positive change in gross fixed assets is greater than the change in accumulated depreciation for a particular year, net fixed assets increase and this constitutes a source of funds.

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