Final answer:
Depreciation in national income accounts is best described as the (A) consumption of fixed capital; it represents the loss in value of capital over time and is subtracted from GNP to calculate NNP.
Step-by-step explanation:
Depreciation in the national income accounts is referred to as the consumption of fixed capital. The process of depreciation accounts for the loss of value that capital goods experience over time due to factors like wear and tear, obsolescence, and aging. To calculate the net national product (NNP), GNP is adjusted by subtracting the value of depreciation.
This adjusted figure, NNP, further divides into national income, which encompasses all income to businesses and individuals, and personal income, which includes only income to people. Depreciation does not equate to negative investment, diminished value, or loss due to wear in this specific context, thereby making option (A) the correct answer.