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Questions and Answers
Which of the following best defines depreciation?
Which of the following best defines depreciation?
- The cost of maintaining an asset
- A decrease in the value of an asset over time (correct)
- An increase in the value of an asset over time
- The total value of an asset
What are the main factors that can cause depreciation of an asset?
What are the main factors that can cause depreciation of an asset?
- Increase in market demand
- Inflation
- Obsolescence (correct)
- Regular maintenance
How does depreciation affect the financial statements of a company?
How does depreciation affect the financial statements of a company?
- It decreases the company's net income (correct)
- It increases the company's revenue
- It has no impact on the financial statements
- It decreases the company's expenses
