The term "consumption of fixed capital" is also referred to as ________________.
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. depreciation.
The term "consumption of fixed capital" is also referred to as "depreciation." Depreciation represents the reduction in the value of fixed assets, such as machinery or buildings, due to wear and tear, obsolescence, or age. It reflects the cost of using up the capital over time and is an important factor in accounting and financial reporting, as it affects the valuation of assets and the calculation of profits and losses for a business.