Which of the following statement is FALSE in relation to the term depreciation?
It is an unexpired cost.
The correct answer is option 3. Depreciation is the decline in the book value of fixed assets due to wear and tear over time. It is a non-cash expense but not an unexpired cost. Depreciation is recorded as an expense but does not involve an actual cash outflow. The term "unexpired cost" would typically refer to costs that are still valid and to be amortized or expensed over time, such as prepaid expenses.
Important Questions from Depreciation, Reserve & Provision
________ refers to writing off the cost of intangible assets like patents, copyrights, trademarks, franchises, and goodwill which have utility for a specified period of time.
Which of the following statement is FALSE?
Which of the following statement is NOT TRUE in regard to reserve and provision?
Provision is _______ against profit.
Match the following.
I. Depreciation
II. Unexpired expenses
III. Interest on capital
IV. Manager’s commission
1. Shown on assets side
2. Shown on debited side
3. Deducted from values of assets
4. Shown as addition to capital
