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Q: Depreciation is an annual allowance for the wear and tear of
  • A. work in progress
  • B. land
  • C. finished goods
  • D. capital goods
Correct Answer: Option D - Depreciation means loss of value of final capital assets over time. Capital goods are depreciated for two reasons– (1) Normal wear and tear (2) Expected obsolescence
D. Depreciation means loss of value of final capital assets over time. Capital goods are depreciated for two reasons– (1) Normal wear and tear (2) Expected obsolescence

Explanations:

Depreciation means loss of value of final capital assets over time. Capital goods are depreciated for two reasons– (1) Normal wear and tear (2) Expected obsolescence