Answer in One Sentence only: Why depreciation is charged? - Book Keeping and Accountancy

Advertisements
Advertisements
One Line Answer

Answer in One Sentence only:

Why depreciation is charged?

Advertisements

Solution

Depreciation is charged to find out the true amount of profit or loss in a particular accounting period and to arrive at the true value of the asset.

Concept: Depreciation
  Is there an error in this question or solution?
Chapter 7: Depreciation - Exercises [Page 241]

APPEARS IN

RELATED QUESTIONS

Depreciation of fixed capital assets refers to :

(a) Normal wear and tear

(b) Foreseen obsolescence

(c) Normal wear and tear and foreseen obsolescence

(d) Unforeseen obsolescence.


Explain the effect of depreciation of domestic currency on exports.


Which account is credited when depreciation is charged on the asset?


Answer in One Sentence only:

What is depreciation?


Write the word/term/phrase which can substitute the following statement:

A continuous, gradual and permanent reduction in the value of a fixed asset.


Select the most appropriate answer from the alternatives given below and rewrite the sentence:

Decrease in the value of fixed assets is known as ______


Do you agree or disagree with the following statement:

Depreciation is non-cash expense.


Complete the following sentence:

Gradual and permanent decrease in the value of asset is known as ____________


Complete the following sentence:

Depreciation is derived from a Latin word ______.


What is meant by depreciation?


Depreciation expenses are included in:


What is the consumption of fixed capital called?


Correct the following statement and rewrite the statement.

Depreciation is calculated on all assets.


Correct the following statement and rewrite the statement.

Depreciation provided on assets is debited to an asset accounts


 Correct the following statement and rewrite the statement.

Profit on sale of the asset is credited to an asset account.


Distinguish between depreciation and capital loss.


On 1st April 2015, Farid of Nasik purchased a Motor Car for ₹ 55,000. The scrap value of the Motor Car was estimated at ₹ 10,000 and its estimated life is 10 years. The Registration charge for the Motor Car was ₹ 5,000.
Show Motor Car Account for first four years, assuming that the books of accounts are closed on 31st March every year.


Share
Notifications



      Forgot password?
Use app×