Question

Decrease in the value of fixed assets is called as:

• A. Loss
• B. Profit
• C. Depreciation
• D. None of these

Hint:

Depreciation = fall in value of fixed assets due to use or passage of time, recorded as expense.

Answer 1

The Correct Option is C

Step 1: Meaning.
Fixed assets lose their value gradually due to use, wear and tear, passage of time, or obsolescence.
Step 2: Accounting term.
This decrease in value is termed as “Depreciation” and is charged to the Profit & Loss A/c as an expense.
Step 3: Conclude.
Hence, decrease in the value of fixed assets is called depreciation.
Final Answer: \[ \boxed{\text{Depreciation}} \]