Question

This term is a financial term that means 'fall in value of goods over a period of time'. What is this term?

• A. Annuity
• B. Arbitrage
• C. Depreciation
• D. Gratuity

Answer 1

The correct option is C Depreciation

• The monetary values of all tangible assets tend to reduce gradually over time due to factors like wear and tear.
• The meaning of depreciation, in very simple words, is the rate at which this value drops. Hence, it compares an asset’s current value with its original cost at the time of acquisition or purchase.