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Question
The number of production units expected to be obtained from the use of an asset by an enterprise is called ______________.
The number of production units expected to be obtained from the use of an asset by an enterprise is called ______________.
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Solution
The correct option is B unit life
Fixed assets are recorded in the books of account on cost basis against which a depreciation is charged to the profit & loss account every year. Useful life of the assets plays a vital role in determining the amount of depreciation.
Useful life of an assets may be determine as number of years or number of units that machine/assets is going to produce. Therefore, unit life is the number of production units expected from the use of asset.
Fixed assets are recorded in the books of account on cost basis against which a depreciation is charged to the profit & loss account every year. Useful life of the assets plays a vital role in determining the amount of depreciation.
Useful life of an assets may be determine as number of years or number of units that machine/assets is going to produce. Therefore, unit life is the number of production units expected from the use of asset.
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