Home › CBSE Class 11 (Commerce) › Accountancy › Depreciation, Provisions and Reserves › Which is a valid reason why depreciation must be…
Which is a valid reason why depreciation must be charged?
ATo match cost with revenue
BTo build cash for replacement
CTo raise the market value
DTo reduce the capital
Answer & Solution
Correct answer: A. To match cost with revenue
Using an asset to earn revenue consumes part of its cost, so that part is set against the same period's revenue.
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