a long explanation on depriciation and also a ques fir practice
Answers
The monetary value of an asset decreases over time due to use, wear and tear or obsolescence. This decrease is measured as depreciation.
Example:
Machinery, equipment, currency are some examples of assets that are likely to depreciate over a specific period of time.
Depreciation is an accounting method of allocating the cost of a tangible or physical asset over its useful life or life expectancy.
Depreciation represents how much of an asset's value has been used up.
Depreciating assets helps companies earn revenue from an asset while expensing a portion of its cost each year the asset is in use. If not taken into account, it can greatly affect profits.
Depreciation is used to account for declines in the carrying value over time. Carrying value represents the difference between the original cost and the accumulated depreciation of the years.