Q300
The main objective of providing depreciation is to
A.
Calculate the true net profit
B.
Compute the actual cash profit
C.
Create funds for replacement of fixed assets
AnswerD.
Reduce tax burden
Answer: Option C
Solution
Answer: Option C
Solution:
The main objective of providing depreciation is to Create funds for replacement of fixed assets. The main objective of charging depreciation is to accumulate adequate fund to replace old asset with the new one after the useful life. Depreciation is charged to fixed assets which helps to show the current value of the asset.