The loss of usefulness because of inadequacy or obsolescence is called
A) functional depreciation.
B) physical depreciation.
C) amortization.
D) cost allocation.

Question

Quizplus · Accepted Answer

Functional depreciation refers to the loss of usefulness of an asset due to inadequacy or obsolescence. Physical depreciation, on the other hand, refers to the actual wear and tear of the asset over time. Amortization and cost allocation are methods of spreading the cost of an asset over its useful life.

The Loss of Usefulness Because of Inadequacy or Obsolescence Is