An increase in the value of fixed asset is referred to as:a)Reserve depreciationb)Appreciationc)Purchase of Assetd)Market capitalizationCorrect answer is option 'C'. Can you explain this answer?

Question

Answer

It should be appreciation as it is increase in value only. Purchase will result in incr in qty also.

Answer

Appreciation.... when appreciation apply supposed that u purchase an item and after purchase price increased.

Answer

Explanation:
Increasing the value of a fixed asset refers to the process of acquiring a new asset or making improvements to an existing one, which ultimately enhances its value. This increase in value can lead to several benefits for a company, such as better financial performance, increased market value, and improved efficiency.
Benefits of increasing the value of fixed assets:
- **Enhanced financial performance**: By investing in fixed assets, companies can improve their operational efficiency and productivity, leading to higher revenues and profitability.
- **Increased market value**: A company with valuable fixed assets is more attractive to investors and creditors, which can result in a higher market capitalization and better access to funding.
- **Improved efficiency**: Upgrading fixed assets can help streamline operations, reduce costs, and increase overall effectiveness, leading to a more competitive position in the market.
Conclusion:
Increasing the value of fixed assets through acquisition or improvements is a strategic move that can have significant long-term benefits for a company. It is important for businesses to carefully manage their fixed assets to ensure they are maximizing their value and contributing to the overall success of the organization.

Answer

If the value of your asset has increased it means the firm has purchased some assets that's why the value of fixed asset has increased.

Similar Commerce Doubts

Machine was purchased for 50000 installation expenses amounted to 2000 and wages wages of 4000 was paid on installation. The scrap value at the end of its useful life of 10years is 6000. Repairs of 6000 was made after 6 months from the purchase date. Calculate the depreciation?

A machinery purchase for Rs. 1,00,000 on 1st January, Further on 1st July New machinery purchased at Rs. 50,000. Depreciation charged @20% p.a. on Straight Line Method. After 3 years value of machinery will be: (

Top Courses for CommerceView all

Chapter Notes for Commerce

Economics Class 12

Economics Class 11

NCERT Books & Solutions for Commerce

Economics for CBSE Class 12 Board Examinations

Top Courses for Commerce

Top Courses for Commerce

Suggested Free Tests

Related Content

Commerce Courses

Other Courses

How To Prepare?

Related Exams

Company