Which option gives a correct cause of depreciation?
Answer and explanation
Correct answer: Regular use and wear of a machine
Depreciation is the gradual fall in the value or service capacity of a fixed asset. Regular use causes physical wear and tear, reducing a machine’s efficiency and useful life. Passage of time and technological obsolescence can also cause depreciation. Wages, tax collection and consumer saving are financial or economic activities, not direct causes of depreciation.
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What is the correct answer to this question?
Regular use and wear of a machine
Why is this the correct answer?
Depreciation is the gradual fall in the value or service capacity of a fixed asset. Regular use causes physical wear and tear, reducing a machine’s efficiency and useful life. Passage of time and technological obsolescence can also cause depreciation. Wages, tax collection and consumer saving are financial or economic activities, not direct causes of depreciation.
Which subject and chapter does this question cover?
This is a Class 11 Accountancy question. Chapter: Depreciation, Provisions, and Reserves.
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