Which of the following is not a reason for providing depreciation?

To ascertain the correct profit/ loss

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To show true & fair view of financial statements

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To provide funds for replacement of assets

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To fulfill the accrual concept

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Solution

The correct option is D
To fulfill the accrual concept

Accrual concept is not a reason for providing depreciation.

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Similar questions

Q8. Consider the following

1. Under provisioning, banks have to set aside or provide funds to a prescribed percentage of their bad assets.

2. The percentage of bad asset that has to be ‘provided for’ is called provisioning coverage ratio.

Which of the above statements are correct?

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