Do you know What is depreciation? What are the causes of depreciation? Is it a cost? Why?
Submitted by: AdministratorDepreciation is a permanent, gradual and continuous reduction in the book value of the fixed asset. Except Land all the fixed assets e.g. Car, Machinery, Furniture etc depreciates in value making the asset useless after the end of a certain period.
Following are the causes of Depreciation:
-Wear and Tear due to regular use of the asset
-Deterioration occurs with the passage of time, whether the asset is in use or not
-Damages done to the assets due to an accident like fire, mishandling etc.
-Depletion of Asset
-Obsolescence i.e. due to new technology in use, new inventions, innovations etc.
Yes, depreciation is a cost. It is a historical cost, which is charged against profits of the organisation reducing the profitability. It is a non-cash cost as it is never paid or incurred in cash.
Submitted by: Administrator
Following are the causes of Depreciation:
-Wear and Tear due to regular use of the asset
-Deterioration occurs with the passage of time, whether the asset is in use or not
-Damages done to the assets due to an accident like fire, mishandling etc.
-Depletion of Asset
-Obsolescence i.e. due to new technology in use, new inventions, innovations etc.
Yes, depreciation is a cost. It is a historical cost, which is charged against profits of the organisation reducing the profitability. It is a non-cash cost as it is never paid or incurred in cash.
Submitted by: Administrator
Read Online Depreciation Job Interview Questions And Answers
Top Depreciation Questions
☺ | Compare: Depreciation as per Companies Act and Income Tax Act? |
☺ | Explain joint factor rate method of calculating depreciation? |
☺ | Do you know What is depreciation? What are the causes of depreciation? Is it a cost? Why? |
☺ | Explain endowment policy method of calculating depreciation? |
☺ | What method of depreciation calculation is used to calculate the tax liability according to Income Tax Act, 1961? |
Top Finance and Accounts Categories
☺ | MBA Finance Interview Questions. |
☺ | Bank Teller Interview Questions. |
☺ | Capital Market Interview Questions. |
☺ | Bank Reconciliation Interview Questions. |
☺ | Cashier Interview Questions. |