Question

Depreciation is generated from which of the following accounting sub-system:

• A. Tax accounting sub-system
• B. Expense accounting sub-system
• C. Fixed assets accounting sub-system
• D. Final accounts sub-system

Hint:

Depreciation is worked out on assets, so it comes from the fixed assets accounting sub-system.

Answer 1

The Correct Option is C

Step 1: Understanding the Concept:
An accounting software is split into sub-systems such as tax, expense, fixed assets and final accounts.
Each sub-system handles one type of accounting data.

Step 2: Working Out the Answer:
Depreciation is charged on fixed assets such as machinery and furniture.
The fixed assets accounting sub-system keeps the cost, life and rate of each asset. It uses them to compute depreciation.
So depreciation is generated from the Fixed assets accounting sub-system, option (C).

Step 3: Why the Other Options Are Wrong:
Option (A): The tax accounting sub-system deals with taxes such as GST and TDS, not with depreciation.
Option (B): The expense accounting sub-system records day-to-day expenses and their payment.
Option (D): The final accounts sub-system only collects balances to prepare the final accounts. It does not generate depreciation.

Final Answer:
Depreciation comes from the fixed assets accounting sub-system. This is option (C).