GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Obsolescence
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Expected physical wear and tear
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Legal or other limits on the use of asset
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All of the above
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Detailed explanation-1: -22. The useful life of a depreciable asset should be estimated after considering the following factors: (i) expected physical wear and tear; (ii) obsolescence; (iii) legal or other limits on the use of the asset.
Detailed explanation-2: -There are three basic things which are required to charge depreciation viz, cost, estimated useful life and probable salvage value; these are the three things which affect the amount of depreciation.
Detailed explanation-3: -Correct answer: Option (d) The estimated life of the asset, its acquisition cost, and its estimated residual value.
Detailed explanation-4: -The cost of the asset. The estimated salvage value of the asset. Estimated useful life of the asset. Obsolescence should be considered when determining an asset’s useful life and will affect the calculation of depreciation.
Detailed explanation-5: -Depreciable cost. Cost less residual value. Depreciable cost is allocated over the useful life of an asset. Estimated useful life. Total number of service units expected from a long-term asset.