What is Depreciation? What are the necessities for providing depreciation?
5 mark question?
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What is Depreciation? What are the necessities for providing depreciation?
5 mark question?
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Ans:-
Depreciation :- It is an accounting process by which a company allocates an asset's cost throughout its useful life.
OR
The monetary value of an asset decreases over time due to use, wear and tear or obsolescence. This decrease is measured as depreciation.
Necessities for providing depreciation are:-
1. To ensure true value of asset(object).
2. To reduces the tax liability.
3. To ascertain the value of income and working results.
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