Question

By charging depreciation
(a) Only Market value is affected
(b) Only Book Value is affected
(c) Both market value and book value is affected
(d) Neither market value nor book value is affected

Answer 1

Answer:

option C india marketing prices is more and book prices also more

Answer 2

By charging depreciation only book value is affected. (Option b)

• When an asset is depreciated, the depreciation is calculated on the book value of the asset.
• Depending on the method of depreciation, the book value reduces over the years till the asset is written off from the books.
• The market value changes as per the forces of supply and demand and depreciation do not affect it.
• So, only book value is affected.