passwella.
Menu

WAEC Financial Accounting 1991 (August) Question 10

Question 10

Depreciation

Depreciation is

  1. A.a charge for the wear and tear of a fixed asset
  2. B.the cost of replacing a fixed asset
  3. C.the loss incurred on the sale of a fixed asset
  4. D.the cost of repairs incurred on a fixed asset
  5. E.the increase in value of a fixed asset.
Show the answer and explanation

Answer: A (a charge for the wear and tear of a fixed asset)

Explanation

Depreciation spreads the fall in value of a fixed asset (wear and tear) over its life.