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Need for Depreciation

Which among t...

Question

Which among the following is not a reason for depreciation ?

A

Use of an asset

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B

Passage of time

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C

Obsolescence

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D

Repair of an asset

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Solution

The correct option is D
Repair of an asset

Repair of an asset is not a reason for depreciation.

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Similar questions

Q. __________ has defined depreciation as "a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time or obsolescence through technology and market changes. Depreciation is allocated so as to charge a fair proportion of depreciable amount in each accounting period during the expected useful life of the asset. Depreciation includes amortization of assets whose useful life is predetermined."

Q. _______ has defined depreciation as "a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time of obsolescence through technology and market changes. Depreciation is allocated so as to charge a fair proportion of depreciable amount in each accounting period during the expected useful life of the asset. Depreciation includes amortization of assets whose useful life is predetermined.

Q. Which method of depreciation is effective if repairs and maintenance cost of an asset increases as it grows old _________________.

Q. _____________ is not included in the depreciable value of an asset for the purpose of depreciation.

Q. Obsolescence of a depreciable asset may be caused by
I. Technological changes
II. Improvement in the production method
III. Legal or other restrictions

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