Question

When market value of an asset is higher than book value, depreciation is not charged.

• A. True
• B. False

Answer 1

The correct option is B False

This statement is false. Depreciation is an accounting method of allocating the cost of an intangible asset over its useful life. It is not related to market value. so whatever be the market value of an asset, Depreciation is charged every year. It is used to account for decline in value. Businesses used depreciation for tax and accounting purposes.