Accounting · Depreciation
In accounting, what does the term 'depreciation' primarily represent?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The cash inflow generated from selling an authorized long-term investment
- 2The gradual reduction in the value of a fixed asset due to wear and tear or obsolescence✓
- 3The total physical destruction of an enterprise's inventory
- 4The increase in the market value of a company's current liquid assets
Correct answer
The gradual reduction in the value of a fixed asset due to wear and tear or obsolescence
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