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Analysing Comparative Statement of Profit and Loss

Depreciation ...

Question

Depreciation is the _________ in the value of fixed assets due to its wear and tear.

A

Increase

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B

Expansion

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C

Addition

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D

Reduction

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Solution

The correct option is C Reduction
Depreciation is a reduction in the value of fixed asset due to normal wear & tear, usage and obsolescence.
Depreciation is a charge on profit & loss account, and debited to profit & loss account.

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