Accounting · Depreciation
Which of the following statements regarding depreciation is INCORRECT?
- 1The amount of depreciation charged on a machinery item is debited to the depreciation account.
- 2Depreciation means decrease in the value of an asset over time.
- 3Depreciation is a cash item.✓
- 4In the reducing balance method, the annual amount charged as depreciation declines over time.
Correct answer
Depreciation is a cash item.
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