Question

2) Which of the following best
describes the "Depreciation?
Valuation of fixed asset at the end
O
of the year
O Verification of assets
O
Allocation of cost of fixed assets
over its useful life
O
Decreasing the market value of
asset
31 A machine was purchased on 1st​

Answer 1

Allocation of cost of a fixed asset over its useful life (Option C)

Explanation:

• Firstly, depreciation is the process of allocation, not valuation.
• In simple words, depreciation tells us how much of the asset's value has been used up over its life expectancy.
• It is calculated from the date of starting the commercial usage of the asset.
• The depreciation is charged on reduced value when it comes to WDV method.

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