Accounting for IGCSE & O level - Accounting Procedures (Section 20 - No. 42)
What is the main reason to record depreciation?
To reflect the current market value of an asset.
To allocate the cost of an asset over its useful life.
To show the physical wear and tear of an asset.
To reduce a company's tax liability immediately.
Explanation
Depreciation systematically allocates the cost over time.
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