Question

Depreciation must be changed so as to ascertain true profit or loss of the business.

• A. True
• B. False

Answer 1

The correct option is A True

Following are the need for charging depreciation:

1. To ascertain true financial performance.
2. To represent true and fair view of the financial position.
3. To ascertain the true cost of production.
4. To comply with legal requirements.
5. To accumulate funds for the replacement of assets.