alleryDepreciation on machinery is:
ADirect expense in Trading
BBalance Sheet entry only
CIndirect expense in P&L
DCapital reserve charge
Answer & Solution
Correct answer: C. Indirect expense in P&L
1. Depreciation is an allocation of asset cost over useful life.
2. It is an indirect expense (not part of cost of goods sold).
3. Hence debited to P&L; balance sheet shows the asset net of accumulated depreciation.
_Source: ICAI BoS Foundation Paper 1, Ch 7 U1 "Final Accounts", §1.4 indirect expenses_
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