The loss of usefulness because of deterioration from age and wear is called
A) functional depreciation.
B) physical depreciation.
C) technological depreciation.
D) amortization.

Question

Quizplus · Accepted Answer

Physical depreciation refers to the loss of value due to wear and tear or aging of the asset. Functional depreciation refers to the loss of value because the asset no longer meets the needs of its intended purpose. Technological depreciation refers to the loss of value because of advances in technology that make the asset obsolete. Amortization refers to the gradual reduction of the value of an intangible asset over time.

The Loss of Usefulness Because of Deterioration from Age and Wear