Question

Give one word/term or phrase for each of the following statements.

Reduction in the value of fixed assets due to its continuous use

Answer 1

Reduction in the value of fixed assets due to its continuous use- Depreciation

Explanation:
Depreciation is the decrease or fall in the value of an asset due to normal wear and tear. In every business, there are some assets of a fixed nature that are used continuously in the daily business operations. Therefore, with the passage of time and continuous use their value may decrease due to normal wear and tear. Thus, a reduction in the value of the fixed assets due to continuous use is termed as depreciation.