Accounting for IGCSE & O level - Accounting Procedures (Section 10 - No. 9)
What is the primary purpose of depreciating a non-current asset?
To reflect the asset's market value.
To accurately reflect the asset's decline in value over time.
To increase the asset's book value.
To simplify tax calculations.
Explanation
Depreciation aims to match the cost of the asset with the revenue it generates over its useful life, reflecting the economic reality of its declining value.
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