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Analysing Comparative Statement of Profit and Loss

Depreciation ...

Question

Depreciation is the process of valuation of asset.

A

True

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B

False

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Solution

The correct option is B False
Depreciation means fall in the value of assets. The net result of an asset's depreciation is that sooner or later the asset will become useless. Depreciation is the process of reduction in the value of asset.

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Similar questions

Q. Depreciation is a process of allocation of the cost of fixed asset.

Q. State whether the following Statements are True or False

1. There is need to provide depreciation if it is maintained with care.
2. Depreciation cannot be provided in case of loss in a financial year.
3. A Specific reserve can be created for any purpose.
4. Capital Reserves are not freely distributed as profits.
5. Under the written down value method depreciation is calculated on the original cost of an asset.
6. Depreciation is the process of valuation of asset.
7. Depreciation is a non-cash expense.
8. Secret reserves are disclosed in Balance Sheet.
9. General reserves is created to meet contingency liability.
10. Depreciation is charged only on fixed asset.

Q. Depreciation Accounting has been defined by the ________ as " a system of accounting which aims to distribute the cost or other basic value of tangible capital assets less salvage (if any) over the estimated useful life of the unit (which may be a group of assets) in a systematic and rational manner. It is a process of allocation and not of valuation".

Q. ______is a process by which the auditor satisfies himself about the actual existence, possession and ownership of the assets and process of _________includes valuation as well.

Q. The issue of fraudulent asset valuation is included in _________.

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