True or false about depreciation

Exercise and reference answers

Questions

1. Statement is true

   Yes

   Statement

   Depreciation is part of a fixed asset's cost.

2. Statement is true

   Yes

   Statement

   Obsolescence comes from new models and technology.

3. Statement is true

   No

   Statement

   A reserve is a charge against profit.

4. Statement is true

   Yes

   Statement

   Depreciation is charged against revenue.

5. Statement is true

   No

   Statement

   Fixed assets never lose value with use.

Instructions

Decide whether each statement is true or false.

Explanation