In depreciation calculation, the useful life of a fixed asset is:

A. a certain figure

B. an estimate

C. a predetermined figure for all fixed assets

D. None of the above

Answer: Option B

Solution(By Examveda Team)

In depreciation calculation, the useful life of a fixed asset is an estimate. Depreciation is “the systematic and rational allocation of the acquisition cost of an asset, less its estimated salvage value or residual value, over the assets estimated useful life.” Simply said, it's a way of allocating a portion of the cost of an asset over the period it can be used.