Which of the following is not a cause of depreciation?

The correct answer is that a sinking fund is not a cause of depreciation. A sinking fund refers to a method of saving money over time to replace or maintain an asset. It is a financial strategy used to ensure that adequate funds will be available to make significant repairs or replacements when necessary. In this context, it serves as a financial tool to offset costs associated with managing deterioration or depreciation of an asset rather than being a direct cause of it.

In contrast, the other options represent specific reasons that contribute to the decrease in value of an asset. Market conditions can affect property value based on supply and demand, economic factors, and trends in the real estate market. Physical deterioration involves the wear and tear that affects a property's physical state over time, such as damage from weather or neglect. Functional obsolescence occurs when a property loses value due to outdated features or poor design, making it less appealing to buyers or tenants. Each of these factors directly leads to a reduction in the asset's market value, distinguishing them from a financial mechanism like a sinking fund.