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Question
Gradual and permanent decrease in the value of an asset is called ________.
Options
scrap value
- cost price
loss
depreciation
MCQ
Solution
Gradual and permanent decrease in the value of an asset is called depreciation.
Explanation:
Depreciation is the reduction in the value of fixed assets associated with their continuous use in the business. It is a permanent and gradual decrease in the value of fixed assets that have a definite span of life, after the expiry of which they lose their utility to a business.
Hence, the correct answer is option (d).
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Additional Information - Depreciation on Fixed Asset
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