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Answer Posted / jagadish
meaning of depreciation with an example: after utilizing for
many years a vehicle(an asset) can not be sold at its
purchase price because of wear and tear. some times company
may have to incur a huge amount of loss at the time of sale
of its assets. In order to avoid this, depreciation will be
charged to profit/loss account at the rate specified by the
management. its very clear that no money will go out of the
firm while charging depreciation. Amount kept aside by this
way will compensate the above mentioned lo
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