Depreciation, Provisions and Reserves · Class 11 · CBSE · Commerce Accountancy
What is the primary cause of depreciation for a tangible fixed asset according to accounting principles?
Practice question from Depreciation, Provisions and Reserves (Class 11 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.
easy · MCQ · Q-58EF1F
What is the primary cause of depreciation for a tangible fixed asset according to accounting principles?
- A.Fluctuation in market price
- B.Constant use, wear and tear, and passage of timeCorrect answer
- C.Increase in the replacement cost of the asset
- D.Management decision to revalue assets
Solution
Depreciation is the permanent, continuous, and gradual decline in the book value of fixed assets due to use, wear and tear, obsolescence, or the passage of time.
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