Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 3 - No. 49)
What is the purpose of adjusting for accumulated depreciation?
To reduce the value of equipment on the balance sheet.
To recognize the cost of using an asset over its useful life.
To increase the company's profit.
To show how much equipment was purchased.
Explanation
Accumulated depreciation represents the total depreciation expense recognized on an asset to date, reflecting its decline in value over time.
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