Home › CBSE Class 11 › accountancy › Depreciation, Provisions and Reserves › Charging depreciation is necessary mainly to:
Charging depreciation is necessary mainly to:
Aincrease the cash balance
Bhide losses from the owner
Craise the asset's market price
Dshow a true and fair view of profit and the financial position
Answer & Solution
Correct answer: D. show a true and fair view of profit and the financial position
Depreciation is charged to show a true and fair view of profit and position.
Related questions
Under the straight line method, annual depreciation equals (cost − scrap value) divided byA reserve created for a specific purpose, such as a dividend equalisation reserve, is a:Creating a provision for depreciation has the effect of ___ the net profit of the businessAn amount set aside out of profits to strengthen the financial position of a business is aAn amount set aside out of profits to meet a known liability of uncertain amount is a:A fall in the value of an asset because it becomes out-of-date due to new technology is caThe writing off of the cost of intangible assets such as goodwill and patents is called:The decline in the value of natural resources such as mines and oil wells is specifically