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What is Amortization?

17. What is Amortization?

1. Accounting techniques are used to periodically lower the book value of a loan.
2. Notable reduction in the utility of an inventory item or fixed asset.
3. Accrual accounting technique used to allocate the cost of extracting natural resources
4. The loss in the physical efficiency of an asset as it ages.

Answer: A) Accounting techniques are used to periodically lower the book value of a loan.

Explanation:

Amortization is a bookkeeping method used to occasionally bring down the book worth of credit or an immaterial resource throughout a set timeframe. Concerning an advance, amortization centres around fanning out advance instalments over the long haul. When applied to a resource, amortization is like deterioration.