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Cash Flow from Operating Activities-Indirect Method

There is no n...

Question

There is no need to provide depreciation if it is maintained with care.

A

True

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B

False

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Solution

The correct option is B False
It is a false statement. Depreciation is the fall in the value of the fixed assets due to their continuous use in the business. Hence, dep. Is charged every year as a charge on the profit. It is necessary to change dep. To calculate the true profit & loss of a business.

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Similar questions

Q. State whether the following Statements are True or False

1. There is need to provide depreciation if it is maintained with care.
2. Depreciation cannot be provided in case of loss in a financial year.
3. A Specific reserve can be created for any purpose.
4. Capital Reserves are not freely distributed as profits.
5. Under the written down value method depreciation is calculated on the original cost of an asset.
6. Depreciation is the process of valuation of asset.
7. Depreciation is a non-cash expense.
8. Secret reserves are disclosed in Balance Sheet.
9. General reserves is created to meet contingency liability.
10. Depreciation is charged only on fixed asset.

State briefly the need for providing depreciation.

Why is there no need to maintain a stock of service?

Q. The need for providing depreciation on fixed assets are ________.

Q. State briefly the need for providing depreciation.

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