Provision of depreciation helps to replace fixed assets when __________.

It becomes outdated

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Its life is over

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It becomes unproductive

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All of the above

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Solution

The correct option is C All of the above
Depreciation is charge due to wear and tear of the asset due to usage. One of the method is to charge the depreciation by creating provision for depreciation.
Provision of depreciation helps to replace fixed asset when:
it becomes outdated
its life over
it becomes unproductive

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Similar questions

Q. Assets continues to show on __________ when provision for depreciation A/c is maintained.

___is a method of depreciation, in which the cost of the asset is spread uniformly over the life years by writing off a fixed amount every year, where as in ___ method of depreciation, a fixed rate of depreciation is charged on the book value of the asset over its useful life.

Q. Which of the following statements is/are false?
I. The term 'depreciation', 'depletion' and 'amortization' have same meaning
II. Provision for depreciation A/c is debited when provision for depreciation is created.
III. The main purpose of charging the Profit and Loss A/c with the amount of depreciated is to spread the cost of an asset over its useful life.

Q. Which of the following statements is/are false?
(I) The term 'depreciation', 'depletion' and 'amortization' convey the same meaning.
(II) Provision For Depreciation A/c debited when Provision For Depreciation A/c is created.
(III) The main purpose of charging the Profit & Loss A/c with the amount of depreciation is to spread the cost of an asset over its useful life for the purpose of income determination.
The correct option is -

Q. Which of the following statements is/are false?
I. The term 'depreciation', 'depletion' and 'amortization' convey the same meaning.
II. Provision for depreciation a/c is debited when provision for depreciation a/c is created.
III. The main purpose of charging the profits and loss a/c with the amount of depreciation is to spread the cost of an asset over useful life for the purpose of income determination.

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