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Question

Which of the following asset is NOT depreciated?
  1. Factory Buildings
  2. Office Equipment
  3. Land
  4. Plant & Machinery

A
Office Equipment
B
Plant & Machinery
C
Land
D
Factory Buildings
Solution
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Land is not depreciated because land is assumed to have an unlimited useful life. Other long-lived assets such as land improvements, buildings, furnishings, equipment, etc. have limited useful lives. Therefore, the costs of those assets must be allocated to those limited accounting periods.

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