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
A state of deterioration, damage done to a building or other property during tenancy can be referred to as:
Which of the following methods of depreciation is prescribed by the Income Tax Act, 1961?
________ method is especially suited to mines, oil wells, quarries, sandpits and similar assets of a wasting character.
______ system of depreciation is followed in case of those assets which are of small values or where the life of the asset cannot be ascertained with certainty.
If a machine (having a scrap value of Rs.1,000) is purchased for Rs.10,000 and it has an effective life of 10 years of 1000 hours each, what will be the amount of depreciation per hour?
