Which of the following is correct?

The correct answer is option 1- Depreciation is the diminution in the value of fixed assets.

Depreciation is the diminution in the value of tangible fixed assets- This is true as depreciation term is related with the tangible fixed assets. It reduces the value of asset per year.

 

Amortization is the practice of spreading an intangible asset's cost over that asset's useful life.

Depletion is the term used for the wasting assets.