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.
Answer (1)
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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