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Answer» Depreciation -
Depreciation mean a reduction in the value of an ASSET overtime. It is a non-cash expense that REDUCES the price of an asset. As time passes, the asset losses it's value KNOWN as "Depreciation".
For example - The cost of the machine is Rs - 1,54,000 and reduced by 20% for next year. find the Reduction price ?
ANSWER : Given : Cost of the machine = Rs 1,54,000
Percentage of reduction = 20% .
1,54,000 x 20%
1,54,000 x 20/100
= 30,800.
1,54,000 - 30,800
= 1,23,200.
Hence : The cost of the machine will be reduced to 1,23,200 .
Reduction price = 30,800.
Price of the Machine after reduction = 1,23,200.
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