Interested to Buy Any Domain ? << Click Here >> for more details...
Why depreciation is charged in P&L Account?
- 25 Answers
- 57251 Views
- Deloitte, FIC, I also Faced
- E-Mail Answers
Answer Posted / harika r
I would say the purpose of charging depreciation to P & L
a/c are
1. Unless a proper charge on account of depreciation is
included in P & L a/c, the true cost of manufacture of
different products will not be ascertained.
2. Depreciation is an expense incurred for earning profit,
which is similar to the hire of an asset, the only
difference being that in one case the amount is paid to an
outsider while, in the other, it is kept in the entity
itself.
3. If depreciation had not been charged, the net income
would have been overstated over the years of the life of
the asset, and if the same was withdrawn or distributed as
dividends, the business would have no funds for the
replacement of the asset.
| Is This Answer Correct ? | 2 Yes | 0 No |
Post New Answer View All Answers
Why do you want to work with us
A company acquires new taxi fleets on 1April 2006 with intention to provide services during the World Cup period and thereafter dispose the taxis .The World Cup runs for three months to 30 June 2006.The company's year end is 30 June 2006.how do you account for taxis at initial recognition .
In OD Account How Many Interest Paid or Not? and second CC Account How Many Interest Paid or Not?
Short Answer on ________Adjusting Entries
All Accounting Question Related Send Me ..
which is the combine entry in ERP?
What Are The Characteristics Of Modern Accounting?
Short Answer on ___________Appreciation
how to calculate stt
How can a Society be converted to a Private Limited Company in the Real Estate Industry and at the same time have the least tax liability upon it's profits earned during the financial year closing
Expand--------TOS
About Funding Working Capital to a Company? A company Turn over is 12 Cr, but in the bank statement credits per month is more that 3 Cr? how this could happen? awaiting your views?
WHAT IS THE DIFFERENCE BETWEEN COST CONTRL & COST REDUCTION
How can i do the entry of of service tax in tally.
How does the ration analysis help in depicting profit and loss
