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Sticky Note
In which of the following situations should the named company not record any depreciation expense on the asset described?
مندرجہ ذیل میں سے کس میں نامزد کمپنی کو بیان کردہ اثاثہ پر کسی فرسودگی کے اخراجات کو ریکارڈ نہیں کرنا چاہئے؟
  1. Computer Sales Company has in inventory a new type of computer, designed “never to become obsolete.”
  2. Metro Advertising owns an office building that has been increasing in value each year since it was purchased.
  3. Commuter Airline is required by law to maintain its aircraft in “as good as new” condition.
  4. None of these
Explanation
  • Commuter Airline: Even if the aircraft is maintained in "as good as new" condition, depreciation is still recorded because assets lose value over time due to wear and tear.
  • Metro Advertising: An increase in market value does not eliminate the need for depreciation, as accounting follows the cost principle.
  • Computer Sales Company: Inventory is not depreciated; however, this does not relate to fixed assets, which are subject to depreciation.
  • Since none of the situations justify avoiding depreciation, "None of these" is the correct answer.
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