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Useful life of an asset can be described as :
- a)The period over which a depreciable asset is expected to be used by the enterprise
- b)The number of production or similar units expected to be obtained form the use of the asset by the enterprise
- c)10 years
- d)Both a and b
Correct answer is option 'D'. Can you explain this answer?
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Useful life of an asset can be described as :a)The period over which a...
Useful life of an asset can be described as the period over which depreciable asset is expected to be used by the enterprise and the number by the enterprise similar units expected to be obtained from the use of the asset by the enterprise. It is basically how long the asset is contributing to the enterprise.
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Useful life of an asset can be described as :a)The period over which a...
Useful Life of an Asset
Definition:
The useful life of an asset can be described as the period over which a depreciable asset is expected to be used by the enterprise. It can also refer to the number of production or similar units expected to be obtained from the use of the asset.
Explanation:
- The useful life of an asset is an important factor in determining the depreciation expense for accounting purposes.
- It helps in spreading the cost of the asset over its useful life, reflecting its gradual consumption or obsolescence.
- The useful life is an estimate based on factors such as wear and tear, technological advancements, and economic conditions.
- It is essential to accurately estimate the useful life of an asset to calculate depreciation correctly and report the financial position of the enterprise accurately.
Importance of Useful Life:
- Helps in determining the depreciation expense.
- Affects the financial statements and profitability of the enterprise.
- Influences investment decisions and asset management strategies.
Therefore, the useful life of an asset is crucial for accounting and financial reporting purposes, as it impacts the company's profitability and financial position. It is essential to carefully assess and estimate the useful life of assets to ensure accurate financial reporting and decision-making.
Definition:
The useful life of an asset can be described as the period over which a depreciable asset is expected to be used by the enterprise. It can also refer to the number of production or similar units expected to be obtained from the use of the asset.
Explanation:
- The useful life of an asset is an important factor in determining the depreciation expense for accounting purposes.
- It helps in spreading the cost of the asset over its useful life, reflecting its gradual consumption or obsolescence.
- The useful life is an estimate based on factors such as wear and tear, technological advancements, and economic conditions.
- It is essential to accurately estimate the useful life of an asset to calculate depreciation correctly and report the financial position of the enterprise accurately.
Importance of Useful Life:
- Helps in determining the depreciation expense.
- Affects the financial statements and profitability of the enterprise.
- Influences investment decisions and asset management strategies.
Therefore, the useful life of an asset is crucial for accounting and financial reporting purposes, as it impacts the company's profitability and financial position. It is essential to carefully assess and estimate the useful life of assets to ensure accurate financial reporting and decision-making.
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Useful life of an asset can be described as :a)The period over which a depreciable asset is expected to be used by the enterpriseb)The number of production or similar units expected to be obtained form the use of the asset by the enterprisec)10 yearsd)Both a and bCorrect answer is option 'D'. Can you explain this answer?
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Useful life of an asset can be described as :a)The period over which a depreciable asset is expected to be used by the enterpriseb)The number of production or similar units expected to be obtained form the use of the asset by the enterprisec)10 yearsd)Both a and bCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Useful life of an asset can be described as :a)The period over which a depreciable asset is expected to be used by the enterpriseb)The number of production or similar units expected to be obtained form the use of the asset by the enterprisec)10 yearsd)Both a and bCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Useful life of an asset can be described as :a)The period over which a depreciable asset is expected to be used by the enterpriseb)The number of production or similar units expected to be obtained form the use of the asset by the enterprisec)10 yearsd)Both a and bCorrect answer is option 'D'. Can you explain this answer?.
Useful life of an asset can be described as :a)The period over which a depreciable asset is expected to be used by the enterpriseb)The number of production or similar units expected to be obtained form the use of the asset by the enterprisec)10 yearsd)Both a and bCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Useful life of an asset can be described as :a)The period over which a depreciable asset is expected to be used by the enterpriseb)The number of production or similar units expected to be obtained form the use of the asset by the enterprisec)10 yearsd)Both a and bCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Useful life of an asset can be described as :a)The period over which a depreciable asset is expected to be used by the enterpriseb)The number of production or similar units expected to be obtained form the use of the asset by the enterprisec)10 yearsd)Both a and bCorrect answer is option 'D'. Can you explain this answer?.
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