Q.Depreciation is caused by :

Depreciation is caused by usage, obsolescence and lapse of time, so all three together are correct.

Depreciation is the gradual and permanent decrease in the value of a fixed asset. Its main causes are:

• Usage (wear and tear) — continuous use of the asset in operations reduces its value.
• Obsolescence — the asset becomes out of date due to new technology, improved models or changes in demand.
• Lapse (effluxion) of time — some assets lose value simply with the passage of time (e.g. leases), regardless of use. …