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Question

The valuing of assets at _________ principle for balance sheet is followed while preparing financial statements.

A
Cost less depreciation
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B
Cost plus depreciation
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C
Depreciation minus accumulated depreciation
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D
Accumulated depreciation plus depreciation
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Solution

The correct option is A Cost less depreciation
Asset valuation is the process of assessing the value of a company, real property or any other item of worth, in particular assets that produce cash flows. While preparing financial statement The fixed asset is depreciated until the book value equals scrap value. Book value at the end of year becomes book value of next year.

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