The main causes of depreciation include:
The main causes of depreciation include:
The correct option is E All of the above
The main causes of
depreciation include the following
1. Physical wear and Tear: Physical wear and Tear when
the fixed assets are put to use, the value of such assets may decrease such
decrease in the value of the asset is said to be due to physical wear and tear
2. With the passage of time: When the assets are exposed
to the forces of nature like weather, winds, rains, etc the value of such an asset may decrease even if they are not put to any use.
3. Changes in the economic
environment: The value of an asset may
decrease due to a decrease in demand for the asset. The demand for the asset may
decrease due to technological changes, changes in habit of the customer etc.
4. Expiration of legal rights: When the use of an asset is governed by the time-bound arrangement, the value of such asset may decrease with the passage of time.
The main causes of depreciation include the following
1. Physical wear and Tear: Physical wear and Tear when the fixed assets are put to use, the value of such assets may decrease such decrease in the value of the asset is said to be due to physical wear and tear
2. With the passage of time: When the assets are exposed to the forces of nature like weather, winds, rains, etc the value of such an asset may decrease even if they are not put to any use.
3. Changes in the economic environment: The value of an asset may decrease due to a decrease in demand for the asset. The demand for the asset may decrease due to technological changes, changes in habit of the customer etc.
4. Expiration of legal rights: When the use of an asset is governed by the time-bound arrangement, the value of such asset may decrease with the passage of time.
