Question

Why is depreciation recorded every year instead of treating replacement as one large future expense?

पर्याय

• Because replacement investment never requires spending.

• Because the machine’s cost is gradually used up over its working life.

• Because capital goods satisfy human wants directly.

• Because consumer goods are always produced first.

Answer 1

The value of a machine is consumed gradually rather than all at once. Recording part of the cost every year reflects this gradual use.