CA Foundation Exam  >  CA Foundation Questions  >  Which of the following statements is/are fals... Start Learning for Free
Which of the following statements is/are false?
I. The term ‘depreciation’, ‘depletion’ and ‘amortization’ convey the same meaning.
II. Provision for depreciation a/c is debited when provision for depreciation a/c is created.
III. The main purpose of charging the profit and loss a/c with the amount of depreciation is to spread the cost of an asset over its useful life for the purpose of income determination.
  • a)
     Only (I) above
  • b)
     Only (II) above
  • c)
     Only (III) above
  • d)
    All (I) (II) and (III) above
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Which of the following statements is/are false?I. The term ‘depr...
Explanation:

I. False
- Depreciation refers to the reduction in the value of a tangible fixed asset due to wear and tear, while depletion refers to the reduction in the value of a natural resource such as coal or oil. Amortization refers to the reduction in the value of an intangible asset such as a patent or copyright.

II. False
- Provision for depreciation a/c is debited when the asset a/c is credited with the amount of depreciation. The provision for depreciation a/c is created to accumulate the total depreciation charged on an asset over its useful life.

III. True
- The main purpose of charging the profit and loss a/c with the amount of depreciation is to spread the cost of an asset over its useful life for the purpose of income determination. This is done in order to match the cost of the asset with the revenue it generates over time.

Therefore, the correct answer is option D, all statements are false.
Free Test
Community Answer
Which of the following statements is/are false?I. The term ‘depr...
I. False: Depreciation refers to the reduction in value of tangible assets (like machinery). Depletion is used for natural resources (like mines, oil). Amortization is the allocation of the cost of intangible assets (like patents, goodwill). So, they do not convey the same meaning.
II. False: When provision for depreciation is created, the Provision for Depreciation account is credited, not debited. The depreciation expense account is debited, and the provision for depreciation account is credited.
III. True: This statement is correct. Depreciation helps allocate the cost of an asset over its useful life to match the expense with the revenue generated during the asset's use.
Statement I and II are false, while Statement III is true.
Answer: D: Only (II) above is false.
Explore Courses for CA Foundation exam

Similar CA Foundation Doubts

Which of the following statements is/are false?I. The term ‘depreciation’, ‘depletion’ and ‘amortization’ convey the same meaning.II. Provision for depreciation a/c is debited when provision for depreciation a/c is created.III. The main purpose of charging the profit and loss a/c with the amount of depreciation is to spread the cost of an asset over its useful life for the purpose of income determination.a)Only (I) aboveb)Only (II) abovec)Only (III) aboved)All (I) (II) and (III) aboveCorrect answer is option 'D'. Can you explain this answer?
Question Description
Which of the following statements is/are false?I. The term ‘depreciation’, ‘depletion’ and ‘amortization’ convey the same meaning.II. Provision for depreciation a/c is debited when provision for depreciation a/c is created.III. The main purpose of charging the profit and loss a/c with the amount of depreciation is to spread the cost of an asset over its useful life for the purpose of income determination.a)Only (I) aboveb)Only (II) abovec)Only (III) aboved)All (I) (II) and (III) aboveCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following statements is/are false?I. The term ‘depreciation’, ‘depletion’ and ‘amortization’ convey the same meaning.II. Provision for depreciation a/c is debited when provision for depreciation a/c is created.III. The main purpose of charging the profit and loss a/c with the amount of depreciation is to spread the cost of an asset over its useful life for the purpose of income determination.a)Only (I) aboveb)Only (II) abovec)Only (III) aboved)All (I) (II) and (III) aboveCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statements is/are false?I. The term ‘depreciation’, ‘depletion’ and ‘amortization’ convey the same meaning.II. Provision for depreciation a/c is debited when provision for depreciation a/c is created.III. The main purpose of charging the profit and loss a/c with the amount of depreciation is to spread the cost of an asset over its useful life for the purpose of income determination.a)Only (I) aboveb)Only (II) abovec)Only (III) aboved)All (I) (II) and (III) aboveCorrect answer is option 'D'. Can you explain this answer?.
Solutions for Which of the following statements is/are false?I. The term ‘depreciation’, ‘depletion’ and ‘amortization’ convey the same meaning.II. Provision for depreciation a/c is debited when provision for depreciation a/c is created.III. The main purpose of charging the profit and loss a/c with the amount of depreciation is to spread the cost of an asset over its useful life for the purpose of income determination.a)Only (I) aboveb)Only (II) abovec)Only (III) aboved)All (I) (II) and (III) aboveCorrect answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation. Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Which of the following statements is/are false?I. The term ‘depreciation’, ‘depletion’ and ‘amortization’ convey the same meaning.II. Provision for depreciation a/c is debited when provision for depreciation a/c is created.III. The main purpose of charging the profit and loss a/c with the amount of depreciation is to spread the cost of an asset over its useful life for the purpose of income determination.a)Only (I) aboveb)Only (II) abovec)Only (III) aboved)All (I) (II) and (III) aboveCorrect answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Which of the following statements is/are false?I. The term ‘depreciation’, ‘depletion’ and ‘amortization’ convey the same meaning.II. Provision for depreciation a/c is debited when provision for depreciation a/c is created.III. The main purpose of charging the profit and loss a/c with the amount of depreciation is to spread the cost of an asset over its useful life for the purpose of income determination.a)Only (I) aboveb)Only (II) abovec)Only (III) aboved)All (I) (II) and (III) aboveCorrect answer is option 'D'. Can you explain this answer?, a detailed solution for Which of the following statements is/are false?I. The term ‘depreciation’, ‘depletion’ and ‘amortization’ convey the same meaning.II. Provision for depreciation a/c is debited when provision for depreciation a/c is created.III. The main purpose of charging the profit and loss a/c with the amount of depreciation is to spread the cost of an asset over its useful life for the purpose of income determination.a)Only (I) aboveb)Only (II) abovec)Only (III) aboved)All (I) (II) and (III) aboveCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of Which of the following statements is/are false?I. The term ‘depreciation’, ‘depletion’ and ‘amortization’ convey the same meaning.II. Provision for depreciation a/c is debited when provision for depreciation a/c is created.III. The main purpose of charging the profit and loss a/c with the amount of depreciation is to spread the cost of an asset over its useful life for the purpose of income determination.a)Only (I) aboveb)Only (II) abovec)Only (III) aboved)All (I) (II) and (III) aboveCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Which of the following statements is/are false?I. The term ‘depreciation’, ‘depletion’ and ‘amortization’ convey the same meaning.II. Provision for depreciation a/c is debited when provision for depreciation a/c is created.III. The main purpose of charging the profit and loss a/c with the amount of depreciation is to spread the cost of an asset over its useful life for the purpose of income determination.a)Only (I) aboveb)Only (II) abovec)Only (III) aboved)All (I) (II) and (III) aboveCorrect answer is option 'D'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
Explore Courses for CA Foundation exam

Top Courses for CA Foundation

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev