State whether the following statement is True or False with reasons: Balance of depreciation account is transferred to Profit and Loss A/c. - Book Keeping and Accountancy

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True or False

State whether the following statement is True or False with reasons:

Balance of depreciation account is transferred to Profit & Loss A/c.

Options

  • True

  • False

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Solution

This statement is True.
Depreciation is a non-each expenses for the business, every income or expense account is to be transferred to profit & loss A/c. to ascertain the actual profit or loss of the business. Therefore the balance of depreciation account is transferred to Profit and Loss A/c.
Concept: Accounting Treatment for Share Capital
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Chapter 7: Depreciation - Exercises [Page 242]

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