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Depreciation occurs due to several factors, including wear and tear from usage, obsolescence from technological advancements, and market value fluctuations. Over time, physical assets like machinery and vehicles lose value as they age and become less efficient. Additionally, changes in consumer preferences or the introduction of newer models can make existing assets less desirable, further contributing to their depreciation. Economic factors such as inflation can also influence the overall value of assets.

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1w ago

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Related Questions

What are the reasons for charging depreciation on non current assets?

depreciation non current asseate


When would a company consider using accelerated depreciation?

There are many reasons that a company may consider using accelerated depreciation. The main reason being that by using accelerated depreciation, this would decrease their tax payments.


Give three reasons why depreciation may occur?

because it has to be in the time to have a business you should have this kind of proposal


Can depreciation be charged on capital work in progress. Give reasons?

no depriciation is usually not charged on capital WIP


How are accumulated depreciation and depreciation related?

Accumulated depreciation and depreciation are related with each other as depreciation is annual expense while accumulated depreciation is the sum of all annual depreciation expenses.


How are accumulated depreciation and depreciation expensese related?

Accumulated depreciation and depreciation are related with each other as depreciation is annual expense while accumulated depreciation is the sum of all annual depreciation expenses.


Why accumulated depreciation exceed depreciation expense?

Depreciation expenses is for one specific fiscal year while accumulated depreciation is the sum of all depreciation expenses that’s why accumulated depreciation exceeds the depreciation if there is depreciation expense in prior year as well.


Distinguish between depreciation policy and the concept of depreciation?

Depreciation policy is management thing that what depreciation method to use and how much depreciation to charge to each asset. Depreciation concepts are concepts which govern the depreciation process which management cannot change they are universal rules to follow depreciation that how straight line depreciation work etc.


What is the entry for accumulated depreciation?

Debit depreciation accountCredit accumulated depreciation


Why depreciation is not charged on livestock?

Please note that in order to charge depreciation, we must know the expected life of the subject so as to distribute the cost of the stock over that period. However, in case of livestock, the life can't be ascertained i.e. the very basis of calculation ofdepreciation is not available and this must be one of the reasons for not charging depreciation on livestock.


What is the difference between depreciation and accumulated depreciation?

Depreciation is for a particular year (say for Year 3). Accumulated depreciation is the aggregate of depreciation from the beginning (say from Year 1 to Year 3)


What is the journal entry accumulated depreciation?

[Debit] Depreciation account [Credit] Accumulated depreciation