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Question

The following statements true or false? Give reasons.
Both 'Expected Obsolescence' and 'Unexpected Obsolescence' are considered for determining the amount of depreciation.

A
True
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B
False
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Solution

The correct option is B False
Both 'Expected Obsolescence' and 'Unexpected Obsolescence' are considered for determining the amount of depreciation- this is a false statement since only expected obsolescence is considered for determining the amount of depreciation. It has two components: loss of value of fixed assets due to change in technology and change in demand.

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