Depreciation refers to:
A)the value of leisure goods.
B)changes in exchange rates.
C)income that we earn but do not receive.
D)investment undertaken merely to replace worn-out capital.
E)the effects of government subsidy programs.

Question

Quizplus · Accepted Answer

Depreciation is the decrease in the value of an asset over time due to wear and tear, obsolescence, or other factors. It is a cost incurred by businesses as they replace worn-out or outdated capital assets, such as machinery, equipment, buildings, and vehicles. Depreciation reflects the fact that these assets lose value over time and need to be replaced or upgraded to maintain production and efficiency.

Depreciation Refers To