Question

The need for providing depreciation on fixed assets are ________.

• A. To ascertain true profit & loss
• B. To ascertain net cash
• C. To comply the statutory requirements
• D. Both A and C

Answer 1

The correct option is D Both A and C

NEED FOR PROVIDING DEPRECIATION

1. To ascertain true financial performance.

2. To present true and fair view of the financial position.

3. To ascertain the true cost of production.

4. To Comply with legal requirement.

5. To accumulate funds for replacement of assets.