Q.

Depreciation is loss in value of               .

A. Final goods
B. Machinery
C. Capital stock
D. Stock of inventory
Answer» B. Machinery
Explanation: The term depreciation represents loss or diminution in the value of an asset consequent upon wear and tear, obsolescence, effluxion of time or permanent fall in market value. Physical deterioration of an asset is caused from movement, strain, friction, erosion etc. For instance, building, machineries, furniture, vehicles, plant etc. The wear and tear is general but primary cause of depreciation.
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