General Education Development (GED) Practice Exam

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Prepare for the GED Exam. Test your skills with a dynamic quiz featuring diverse questions and detailed explanations. Sharpen your preparation and excel in your exam!

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Which of the following types of assets would not be subject to depreciation?

Heavy equipment
Computers
Real estate
Company vehicles

The correct answer is: Real estate

Real estate is not subject to depreciation in the same way that tangible assets like equipment, computers, or vehicles are. While real estate does undergo a process called "depreciation" for accounting purposes, it typically refers to the deduction in value that is considered as part of an expense on financial statements. Real estate generally appreciates over time due to factors such as demand, location, and overall market conditions, meaning its market value can increase rather than decrease. This characteristic distinguishes it from assets like heavy equipment, computers, and company vehicles, which typically have finite useful lives and lose value as they age or become outdated due to wear and tear and technological advances. Therefore, while real estate ownership may come with other costs or considerations, it does not fit the conventional definition of depreciation applied to other types of assets.