Question

Fixed Asset Accounting sub-system generates information about:

• A. Loans
• B. Purchase expenses
• C. Depreciation
• D. Inventory purchased

Hint:

The fixed asset sub-system keeps asset data, so it generates information about depreciation.

Answer 1

The Correct Option is C

Step 1: Understanding the Concept:
The fixed asset accounting sub-system looks after the assets of the business.
It stores cost, date of purchase, life and rate for each asset.

Step 2: Working Out the Answer:
With these data the sub-system can compute the yearly charge on every asset.
That charge is depreciation.
So the sub-system generates information about Depreciation, option (C).

Step 3: Why the Other Options Are Wrong:
Option (A): Loans are handled by a loan or liabilities sub-system, not by fixed assets.
Option (B): Purchase expenses are recorded under the expense or purchase accounting sub-system.
Option (D): Inventory purchased is handled by the inventory accounting sub-system.

Final Answer:
The fixed asset accounting sub-system generates depreciation information. This is option (C).