SAP Financial Accounting (SAP FI) Practice Exam

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Prepare for the SAP Financial Accounting (SAP FI) Exam with our interactive quiz. Utilize flashcards and multiple choice questions, each with hints and explanations, to excel in your exam!

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Which type of depreciation is generally unexpected and not part of standard accounting?

Ordinary
Special
Planned
Unplanned

The correct answer is: Unplanned

Unplanned depreciation refers to a reduction in the value of an asset that occurs due to unforeseen circumstances or events, such as natural disasters, accidents, or changes in market conditions. This type of depreciation is not typically scheduled or predicted as part of regular accounting practices and differs from ordinary, planned, or special depreciation, which can often be anticipated and accounted for in financial statements. Ordinary depreciation is accounted for based on systematic allocation of an asset's cost over its useful life, while planned depreciation relates to a scheduled approach for the depreciation expense. Special depreciation often accounts for tax incentives or adjustments and is a result of specific governmental policies but is generally still anticipated. In contrast, unplanned depreciation arises unexpectedly, highlighting its distinctive nature in accounting practices.