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Analysing Comparative Statement of Profit and Loss

Depreciation ...

Question

Depreciation provides fund for replacement of asset.

A

True

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B

False

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Solution

The correct option is A True
A portion of profits is set aside in the form of depreciation and accumulated each year to provide a definite amount at a certain future date for the specific purpose of replacement of asset at the end of its useful life.

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On the basis of the information given below, answer the following question.
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Analysing Comparative Statement of Profit and Loss

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