BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The following are the common causes of depreciation except..
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Wear and tear
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Passage of time
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Usage
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Amount of bad debts
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Explanation:
Detailed explanation-1: -Following are the causes of Depreciation excepta)Wear and tear due to use or passage of time. b)normal factorsc)Expiration of legal rights. d)Obsolescence. Correct answer is option ‘B’.
Detailed explanation-2: -When asset losses its efficiency, its value goes down and depreciation arises. This is true in the case of tangible assets like plant and machinery, building, furniture, tools and equipment used in the factory. Market value and accident of an asset are other causes of depreciation that decrease the value of assets.
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