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Which of the following is correct? |
Depreciation is the diminution in the value of tangible fixed assets Amortisation is writing off the amount relating to current assets Amortisation and Depreciation is writing off the amount relating to wasting assets None of the above |
Depreciation is the diminution in the value of tangible fixed assets |
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. |
