Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 4 - No. 5)
In accounting, what is the purpose of depreciation?
To show how much cash has been spent on an asset.
To reflect the decline in value of an asset over time.
To show the asset's current market value.
To increase net profit.
Explanation
Depreciation allocates the cost of the asset over its useful life.
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