Which term describes a decrease in the value of an asset over time?

Which term describes a decrease in the value of an asset over time?

• A. Appreciate
• B. Depreciate
• C. Bonds
• D. Mutual Fund

Answer: (B)

When an asset’s value falls as time passes, the word that fits is depreciation. This describes the downward change in value due to wear, age, or obsolescence. If you’re speaking about the action, you’d say the asset depreciates over time. In accounting, depreciation is the formal process of allocating the asset’s cost over its useful life and is a non-cash expense that affects financial statements. The opposite idea is to appreciate, which means the asset’s value increases. Bonds and mutual funds are types of investments rather than the specific term for a value decline, and their values can rise or fall depending on market conditions.

When an asset’s value falls as time passes, the word that fits is depreciation. This describes the downward change in value due to wear, age, or obsolescence. If you’re speaking about the action, you’d say the asset depreciates over time. In accounting, depreciation is the formal process of allocating the asset’s cost over its useful life and is a non-cash expense that affects financial statements. The opposite idea is to appreciate, which means the asset’s value increases. Bonds and mutual funds are types of investments rather than the specific term for a value decline, and their values can rise or fall depending on market conditions.