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Analysing Comparative Statement of Profit and Loss

Unforeseen ob...

Question

Unforeseen obsolescence of fixed capital assets during production is ________________.

A

Consumption of Fixed Capital

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B

Capital Loss

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C

Income Loss

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D

None of the above

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Solution

The correct option is B Capital Loss
Unforeseen obsolescence of fixed capital assets during production is capital loss. Unforeseen obsolescence which may happen due to natural calamity is not taken into account while calculating depreciation and hence, it causes capital loss.

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