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Question : Loss in the value of fixed assets due to unforeseen obsolescence is known as ______________________- and due to passage of time is known as _______________. 

Option 1: Depreciation, Capital gain

Option 2: Capital loss, Capital gain

Option 3: Capital loss, depreciation.

Option 4: Depreciation, Depreciation.


Team Careers360 15th Jan, 2024
Answer (1)
Team Careers360 16th Jan, 2024

Correct Answer: Capital loss, depreciation.


Solution :

The basic difference between depreciation and capital loss is what cause the value of fixed assets to decline. Depreciation, however, results from normal wear and tear, unforeseen harm, and expected obsolescence. On the other hand, economic recession and natural disasters cause capital loss.
Hence, Option C is correct.

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