By the amount of depreciation, the value of asset __________.

decreases

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increases

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becomes zero

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remains costant

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Solution

The correct option is A decreases
Depreciation is defined as the reduction in the value of fixed asset due to normal wear & tear, usage and obsolescence. Depreciation is a loss and debited to profit & loss account.
Following journal entry is passed for depreciation:

Depreciation A/c Dr.
To Asset A/c

By the amount of depreciation, the value of fixed asset decreases.

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